In 2015 Rob Broen was appointed CEO of Athabasca Oil Corporation (TSE:ATH). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. 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 Rob Broen’s Compensation Compare With Similar Sized Companies?
Our data indicates that Athabasca Oil Corporation is worth CA$495m, and total annual CEO compensation is CA$4.2m. (This number is for the twelve months until December 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at CA$500k. When we examined a selection of companies with market caps ranging from CA$266m to CA$1.1b, we found the median CEO total compensation was CA$1.3m.
It would therefore appear that Athabasca Oil Corporation pays Rob Broen more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration 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.
The graphic below shows how CEO compensation at Athabasca Oil has changed from year to year.
Is Athabasca Oil Corporation Growing?
Athabasca Oil Corporation has increased its earnings per share (EPS) by an average of 36% a year, over the last three years (using a line of best fit). Its revenue is up 2.4% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. It could be important to check this free visual depiction of what analysts expect for the future.
Has Athabasca Oil Corporation Been A Good Investment?
With a three year total loss of 12%, Athabasca Oil Corporation would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared the total CEO remuneration paid by Athabasca Oil Corporation, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. Considering the per share profit growth, but keeping in mind the weak returns, we’d need more time to form a view on CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Athabasca Oil.
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.
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