Karl Ruud became the CEO of AKITA Drilling Ltd. (TSE:AKT.A) in 2009, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for AKITA Drilling.
How Does Total Compensation For Karl Ruud Compare With Other Companies In The Industry?
Our data indicates that AKITA Drilling Ltd. has a market capitalization of CA$12m, and total annual CEO compensation was reported as CA$759k for the year to December 2019. Notably, that's a decrease of 31% over the year before. In particular, the salary of CA$500.0k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under CA$264m, the reported median total CEO compensation was CA$898k. So it looks like AKITA Drilling compensates Karl Ruud in line with the median for the industry.
On an industry level, roughly 37% of total compensation represents salary and 63% is other remuneration. AKITA Drilling is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at AKITA Drilling Ltd.'s Growth Numbers
Over the past three years, AKITA Drilling Ltd. has seen its earnings per share (EPS) grow by 12% per year. The trailing twelve months of revenue was pretty much the same as the prior period.
Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 AKITA Drilling Ltd. Been A Good Investment?
Since shareholders would have lost about 96% over three years, some AKITA Drilling Ltd. investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we touched on above, AKITA Drilling 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. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. However, EPS growth is positive over the same time frame. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 3 warning signs for AKITA Drilling you should be aware of, and 1 of them doesn't sit too well with us.
Switching gears from AKITA Drilling, 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.
If you’re looking to trade AKITA Drilling, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email email@example.com.