Does Condor Petroleum Inc.’s (TSE:CPI) CEO Pay Matter?

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Don Streu became the CEO of Condor Petroleum Inc. (TSE:CPI) in 2008. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Condor Petroleum

How Does Don Streu’s Compensation Compare With Similar Sized Companies?

According to our data, Condor Petroleum Inc. has a market capitalization of CA$7.9m, and pays its CEO total annual compensation worth CA$446k. (This number is for the twelve months until December 2018). Notably, that’s an increase of 19% over the year before. We think total compensation is more important but we note that the CEO salary is lower, at CA$375k. We examined a group of similar sized companies, with market capitalizations of below CA$268m. The median CEO total compensation in that group is CA$153k.

It would therefore appear that Condor Petroleum Inc. pays Don Streu 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.

You can see, below, how CEO compensation at Condor Petroleum has changed over time.

TSX:CPI CEO Compensation, June 19th 2019
TSX:CPI CEO Compensation, June 19th 2019

Is Condor Petroleum Inc. Growing?

Condor Petroleum Inc. has increased its earnings per share (EPS) by an average of 5.6% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 65%.

It’s hard to interpret the strong revenue growth as anything other than a positive. Combined with modest EPS growth, we get a good impression of the company. I’d stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Condor Petroleum Inc. Been A Good Investment?

Since shareholders would have lost about 85% over three years, some Condor Petroleum Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

We examined the amount Condor Petroleum Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. So shareholders might not feel great about the fact that CEO pay increased on last year. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. Shareholders may want to check for free if Condor Petroleum insiders are buying or selling shares.

Important note: Condor Petroleum 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.