Is Volga Gas plc’s (LON:VGAS) CEO Pay Justified?

In 2015 Andrey Zozulya was appointed CEO of Volga Gas plc (LON:VGAS). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Volga Gas

How Does Andrey Zozulya’s Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Volga Gas plc has a market cap of UKĀ£24m, and reported total annual CEO compensation of US$356k for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$181k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$322k.

So Andrey Zozulya is paid around the average of the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

You can see, below, how CEO compensation at Volga Gas has changed over time.

AIM:VGAS CEO Compensation, February 21st 2020
AIM:VGAS CEO Compensation, February 21st 2020

Is Volga Gas plc Growing?

Over the last three years Volga Gas plc has grown its earnings per share (EPS) by an average of 71% per year (using a line of best fit). Its revenue is up 53% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don’t have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Volga Gas plc Been A Good Investment?

With a three year total loss of 31%, Volga Gas plc would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

Andrey Zozulya is paid around what is normal the leaders of comparable size companies.

We’d say the company can boast of its EPS growth, but we cannot say the same about the lacklustre shareholder returns (over the last three years). We’d be surprised if shareholders want to see a pay rise for the CEO, but we’d stop short of calling their pay too generous. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Volga Gas (free visualization of insider trades).

Important note: Volga Gas may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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