This article will reflect on the compensation paid to Wayne Heili who has served as CEO of Peninsula Energy Limited (ASX:PEN) since 2017. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Peninsula Energy
Comparing Peninsula Energy Limited's CEO Compensation With the industry
According to our data, Peninsula Energy Limited has a market capitalization of AU$125m, and paid its CEO total annual compensation worth US$815k over the year to June 2020. We note that's an increase of 53% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$324k.
In comparison with other companies in the industry with market capitalizations under AU$259m, the reported median total CEO compensation was US$273k. Hence, we can conclude that Wayne Heili is remunerated higher than the industry median. Furthermore, Wayne Heili directly owns AU$538k worth of shares in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | US$324k | US$326k | 40% |
| Other | US$491k | US$205k | 60% |
| Total Compensation | US$815k | US$532k | 100% |
On an industry level, roughly 74% of total compensation represents salary and 26% is other remuneration. In Peninsula Energy's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Peninsula Energy Limited's Growth Numbers
Peninsula Energy Limited's earnings per share (EPS) grew 25% per year over the last three years. Its revenue is down 7.7% over the previous year.
This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Peninsula Energy Limited Been A Good Investment?
Since shareholders would have lost about 60% over three years, some Peninsula Energy Limited 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, Peninsula Energy Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But the company has impressed with its EPS growth, but shareholder returns — over the same period — have been disappointing. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 4 warning signs for Peninsula Energy (1 is significant!) that you should be aware of before investing here.
Switching gears from Peninsula 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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About ASX:PEN
Peninsula Energy
Operates as a uranium exploration company in the United States.
Exceptional growth potential with excellent balance sheet.
