What We Learned About Marenica Energy's (ASX:MEY) CEO Compensation

By
Simply Wall St
Published
February 25, 2021
ASX:EL8
Source: Shutterstock

This article will reflect on the compensation paid to Murray Hill who has served as CEO of Marenica Energy Limited (ASX:MEY) since 2012. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Marenica Energy.

Check out our latest analysis for Marenica Energy

How Does Total Compensation For Murray Hill Compare With Other Companies In The Industry?

According to our data, Marenica Energy Limited has a market capitalization of AU$28m, and paid its CEO total annual compensation worth AU$365k over the year to June 2020. This means that the compensation hasn't changed much from last year. Notably, the salary which is AU$260.0k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below AU$252m, reported a median total CEO compensation of AU$333k. This suggests that Marenica Energy remunerates its CEO largely in line with the industry average. What's more, Murray Hill holds AU$772k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary AU$260k AU$260k 71%
Other AU$105k AU$108k 29%
Total CompensationAU$365k AU$368k100%

On an industry level, roughly 71% of total compensation represents salary and 29% is other remuneration. Our data reveals that Marenica Energy allocates salary more or less in line with the wider market. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ceo-compensation
ASX:MEY CEO Compensation February 25th 2021

A Look at Marenica Energy Limited's Growth Numbers

Marenica Energy Limited has seen its earnings per share (EPS) increase by 42% a year over the past three years. It achieved revenue growth of 20% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Marenica Energy Limited Been A Good Investment?

Marenica Energy Limited has generated a total shareholder return of 16% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

As we noted earlier, Marenica Energy pays its CEO in line with similar-sized companies belonging to the same industry. However, it's admirable that over the last three years, EPS growth for the company has been impressive, though the same can't be said for investor returns. As a result of these considerations, we would suggest the compensation is reasonable, but looking ahead shareholders will likely want to see healthier returns.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 5 warning signs for Marenica Energy (3 are significant!) that you should be aware of before investing here.

Switching gears from Marenica Energy, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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