Should You Worry About Gear Energy Ltd.’s (TSE:GXE) CEO Pay Cheque?

Ingram Gillmore became the CEO of Gear Energy Ltd. (TSE:GXE) in 2010. First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Gear Energy

How Does Ingram Gillmore’s Compensation Compare With Similar Sized Companies?

According to our data, Gear Energy Ltd. has a market capitalization of CA$96m, and pays its CEO total annual compensation worth CA$333k. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at CA$245k. We looked at a group of companies with market capitalizations under CA$265m, and the median CEO total compensation was CA$144k.

As you can see, Ingram Gillmore is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Gear Energy Ltd. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Gear Energy, below.

TSX:GXE CEO Compensation, August 27th 2019
TSX:GXE CEO Compensation, August 27th 2019

Is Gear Energy Ltd. Growing?

Gear Energy Ltd. has increased its earnings per share (EPS) by an average of 145% a year, over the last three years (using a line of best fit). It achieved revenue growth of 4.6% over the last year.

This demonstrates that the company has been improving recently. A good result. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions.

Has Gear Energy Ltd. Been A Good Investment?

Given the total loss of 39% over three years, many shareholders in Gear Energy Ltd. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

We compared the total CEO remuneration paid by Gear Energy Ltd., 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.

Importantly, though, the company has impressed with its earnings per share growth, over three years. 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. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Gear Energy (free visualization of insider trades).

If you want to buy a stock that is better than Gear Energy, this free list of high return, low debt companies is a great place to look.

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.