What We Learned About Global Energy Ventures' (ASX:GEV) CEO Pay

Fletcher Brand is the CEO of Global Energy Ventures Ltd. (ASX:GEV), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Global Energy Ventures

Comparing Global Energy Ventures Ltd.'s CEO Compensation With the industry

At the time of writing, our data shows that Global Energy Ventures Ltd. has a market capitalization of AU$31m, and reported total annual CEO compensation of AU$450k for the year to June 2020. Notably, that's a decrease of 16% over the year before. We note that the salary portion, which stands at AU$244.6k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below AU$257m, reported a median total CEO compensation of AU$353k. This suggests that Global Energy Ventures remunerates its CEO largely in line with the industry average. What's more, Fletcher Brand holds AU$1.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 76% of total compensation represents salary, while the remainder of 24% is other remuneration. It's interesting to note that Global Energy Ventures allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Global Energy Ventures Ltd.'s Growth Numbers

Global Energy Ventures Ltd.'s earnings per share (EPS) grew 46% per year over the last three years. In the last year, its revenue is up 35%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Global Energy Ventures Ltd. Been A Good Investment?

Since shareholders would have lost about 83% over three years, some Global Energy Ventures Ltd. investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we touched on above, Global Energy Ventures Ltd. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, the company has logged negative shareholder returns over the previous three years. But on the bright side, EPS growth is positive over the same period. Overall, we wouldn't say Fletcher is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 5 warning signs for Global Energy Ventures you should be aware of, and 1 of them makes us a bit uncomfortable.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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