Should You Be Pleased About The CEO Pay At AKITA Drilling Ltd.'s (TSE:AKT.A)

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In 2009 Karl Ruud was appointed CEO of AKITA Drilling Ltd. (TSE:AKT.A). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for AKITA Drilling

How Does Karl Ruud's Compensation Compare With Similar Sized Companies?

According to our data, AKITA Drilling Ltd. has a market capitalization of CA$108m, and pays its CEO total annual compensation worth CA$1.1m. (This is based on the year to December 2018). That's just a smallish increase of 4.4% on last year. We think total compensation is more important but we note that the CEO salary is lower, at CA$496k. We looked at a group of companies with market capitalizations under CA$267m, and the median CEO total compensation was CA$151k.

Thus we can conclude that Karl Ruud receives more in total compensation than the median of a group of companies in the same market, and of similar size to AKITA Drilling Ltd.. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see a visual representation of the CEO compensation at AKITA Drilling, below.

Is AKITA Drilling Ltd. Growing?

On average over the last three years, AKITA Drilling Ltd. has shrunk earnings per share by 12% each year (measured with a line of best fit). In the last year, its revenue is up 82%.

As investors, we are a bit wary of companies that have lower earnings per share, over three years. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. You might want to check this free visual report on analyst forecasts for future earnings.

Has AKITA Drilling Ltd. Been A Good Investment?

Since shareholders would have lost about 61% over three years, some AKITA Drilling Ltd. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared total CEO remuneration at AKITA Drilling 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.

The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. Shareholders may want to check for free if AKITA Drilling insiders are buying or selling shares.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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. Thank you for reading.