Does Bonavista Energy Corporation’s (TSE:BNP) CEO Pay Reflect Performance?

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

Jason Skehar became the CEO of Bonavista Energy Corporation (TSE:BNP) in 2012. 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Bonavista Energy

How Does Jason Skehar’s Compensation Compare With Similar Sized Companies?

According to our data, Bonavista Energy Corporation has a market capitalization of CA$307m, and pays its CEO total annual compensation worth CA$3.0m. (This figure is for the year to 2017). While we always look at total compensation first, we note that the salary component is less, at CA$440k. When we examined a selection of companies with market caps ranging from CA$131m to CA$526m, we found the median CEO compensation was CA$858k.

Thus we can conclude that Jason Skehar receives more in total compensation than the median of a group of companies in the same market, and of similar size to Bonavista Energy Corporation. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at Bonavista Energy has changed over time.

TSX:BNP CEO Compensation February 6th 19
TSX:BNP CEO Compensation February 6th 19

Is Bonavista Energy Corporation Growing?

Over the last three years Bonavista Energy Corporation has grown its earnings per share (EPS) by an average of 71% per year (using a line of best fit). In the last year, its revenue changed by just -0.06%.

This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business. It could be important to check this free visual depiction of what analysts expect for the future.

Has Bonavista Energy Corporation Been A Good Investment?

With a three year total loss of 28%, Bonavista Energy Corporation would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

We examined the amount Bonavista Energy Corporation pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

However, the earnings per share growth over three years is certainly impressive. On the other hand returns to investors over the same period have probably disappointed many. 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. Shareholders may want to check for free if Bonavista Energy 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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.