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Ian Dundas became the CEO of Enerplus Corporation (TSE:ERF) in 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Ian Dundas’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Enerplus Corporation has a market cap of CA$2.3b, and is paying total annual CEO compensation of CA$4.0m. (This figure is for the year to December 2018). That’s a modest increase of 4.2% on the prior year year. We think total compensation is more important but we note that the CEO salary is lower, at CA$527k. When we examined a selection of companies with market caps ranging from CA$1.3b to CA$4.2b, we found the median CEO total compensation was CA$2.9m.
Thus we can conclude that Ian Dundas receives more in total compensation than the median of a group of companies in the same market, and of similar size to Enerplus 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 Enerplus has changed over time.
Is Enerplus Corporation Growing?
Enerplus Corporation has increased its earnings per share (EPS) by an average of 78% a year, over the last three years (using a line of best fit). Its revenue is up 37% over last year.
This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. It could be important to check this free visual depiction of what analysts expect for the future.
Has Enerplus Corporation Been A Good Investment?
With a total shareholder return of 31% over three years, Enerplus Corporation shareholders would, in general, be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
We compared the total CEO remuneration paid by Enerplus Corporation, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Looking at the same time period, we think that the shareholder returns are respectable. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn’t call the CEO pay problematic. So you may want to check if insiders are buying Enerplus shares with their own money (free access).
Important note: Enerplus 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 firstname.lastname@example.org. 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.