In 2012 Alex Verge was appointed CEO of Journey Energy Inc. (TSE:JOY). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.
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How Does Alex Verge’s Compensation Compare With Similar Sized Companies?
According to our data, Journey Energy Inc. has a market capitalization of CA$76m, and pays its CEO total annual compensation worth CA$690k. (This is based on the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at CA$243k. We looked at a group of companies with market capitalizations under CA$266m, and the median CEO compensation was CA$157k.
As you can see, Alex Verge is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Journey Energy Inc. is paying too much. 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 Journey Energy has changed over time.
Is Journey Energy Inc. Growing?
Journey Energy Inc. has increased its earnings per share (EPS) by an average of 6.4% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 13%.
This revenue growth could really point to a brighter future. And, while modest, the earnings per share growth is noticeable. So while we’d stop just short of calling this a top performer, but we think it is well worth watching.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Journey Energy Inc. Been A Good Investment?
Journey Energy Inc. has served shareholders reasonably well, with a total return of 23% over three years. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary…
We compared total CEO remuneration at Journey Energy Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
Over the last three years returns to investors have been uninspiring, and we would have liked to see stronger business growth. In conclusion we think the company should definitely focus on improving the business before awarding any large pay rises. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Journey Energy.
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
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.