Cathedral Energy Services Ltd.'s (TSE:CET) CEO Looks Like They Deserve Their Pay Packet

Key Insights

• Cathedral Energy Services will host its Annual General Meeting on 9th of May
• CEO Tom Connors' total compensation includes salary of CA$400.0k
• The total compensation is similar to the average for the industry
• Cathedral Energy Services' EPS grew by 120% over the past three years while total shareholder return over the past three years was 187%

The performance at Cathedral Energy Services Ltd. (TSE:CET) has been quite strong recently and CEO Tom Connors has played a role in it. Coming up to the next AGM on 9th of May, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

See our latest analysis for Cathedral Energy Services

How Does Total Compensation For Tom Connors Compare With Other Companies In The Industry?

Our data indicates that Cathedral Energy Services Ltd. has a market capitalization of CA$209m, and total annual CEO compensation was reported as CA$1.7m for the year to December 2023. Notably, that's a decrease of 12% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$400k.

On examining similar-sized companies in the Canadian Energy Services industry with market capitalizations between CA$137m and CA$547m, we discovered that the median CEO total compensation of that group was CA$1.8m. This suggests that Cathedral Energy Services remunerates its CEO largely in line with the industry average. Furthermore, Tom Connors directly owns CA$2.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CA$400k	CA$370k	23%
Other	CA$1.3m	CA$1.6m	77%
Total Compensation	CA$1.7m	CA$1.9m	100%

Speaking on an industry level, nearly 23% of total compensation represents salary, while the remainder of 77% is other remuneration. Although there is a difference in how total compensation is set, Cathedral Energy Services more or less reflects the market in terms of setting the salary. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Cathedral Energy Services Ltd.'s Growth Numbers

Over the past three years, Cathedral Energy Services Ltd. has seen its earnings per share (EPS) grow by 120% per year. Its revenue is up 71% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Cathedral Energy Services Ltd. Been A Good Investment?

Most shareholders would probably be pleased with Cathedral Energy Services Ltd. for providing a total return of 187% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 4 warning signs for Cathedral Energy Services that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.