P. MacFarlane became the CEO of Cathedral Energy Services Ltd. (TSE:CET) in 2013. 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 – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does P. MacFarlane’s Compensation Compare With Similar Sized Companies?
According to our data, Cathedral Energy Services Ltd. has a market capitalization of CA$15m, and pays its CEO total annual compensation worth CA$425k. (This is based on the year to December 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at CA$344k. We examined a group of similar sized companies, with market capitalizations of below CA$267m. The median CEO total compensation in that group is CA$138k.
As you can see, P. MacFarlane is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Cathedral Energy Services Ltd. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Cathedral Energy Services has changed over time.
Is Cathedral Energy Services Ltd. Growing?
Cathedral Energy Services Ltd. has reduced its earnings per share by an average of 78% a year, over the last three years (measured with a line of best fit). Its revenue is up 4.0% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
Has Cathedral Energy Services Ltd. Been A Good Investment?
With a three year total loss of 52%, Cathedral Energy Services Ltd. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at Cathedral Energy Services Ltd. with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
Over the same period, investors would have come away with nothing in the way of share price gains. In our opinion the CEO might be paid too generously! So you may want to check if insiders are buying Cathedral Energy Services shares with their own money (free access).
If you want to buy a stock that is better than Cathedral Energy Services, this free list of high return, low debt companies is a great place to look.
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