In 2013 Myron Stadnyk was appointed CEO of ARC Resources Ltd. (TSE:ARX). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Myron Stadnyk’s Compensation Compare With Similar Sized Companies?
Our data indicates that ARC Resources Ltd. is worth CA$2.0b, and total annual CEO compensation is CA$4.7m. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at CA$570k. We examined companies with market caps from CA$1.3b to CA$4.3b, and discovered that the median CEO total compensation of that group was CA$2.9m.
As you can see, Myron Stadnyk is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean ARC Resources Ltd. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at ARC Resources has changed over time.
Is ARC Resources Ltd. Growing?
Over the last three years ARC Resources Ltd. has grown its earnings per share (EPS) by an average of 23% per year (using a line of best fit). Its revenue is up 3.4% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see modest revenue growth, suggesting the underlying business is healthy.
Has ARC Resources Ltd. Been A Good Investment?
Given the total loss of 72% over three years, many shareholders in ARC Resources Ltd. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We compared total CEO remuneration at ARC Resources Ltd. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling ARC Resources shares (free trial).
Important note: ARC Resources may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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