Is Journey Energy Inc. (TSE:JOY) Overpaying Its CEO?

Alex Verge has been the CEO of Journey Energy Inc. (TSE:JOY) since 2012. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. 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.

View our latest analysis for Journey Energy

How Does Alex Verge’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Journey Energy Inc. has a market cap of CA$118m, and is paying total annual CEO compensation of CA$690k. (This number is for the twelve months until December 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at CA$243k. We took a group of companies with market capitalizations below CA$268m, and calculated the median CEO total compensation to be CA$142k.

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. 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 a visual representation of the CEO compensation at Journey Energy, below.

TSX:JOY CEO Compensation, April 24th 2019
TSX:JOY CEO Compensation, April 24th 2019

Is Journey Energy Inc. Growing?

Over the last three years Journey Energy Inc. has shrunk its earnings per share by an average of 19% per year (measured with a line of best fit). Its revenue is up 4.4% over last year.

Sadly for shareholders, earnings per share are actually down, over three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.

Has Journey Energy Inc. Been A Good Investment?

With a total shareholder return of 31% over three years, Journey Energy Inc. 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.

In Summary…

We examined the amount Journey Energy Inc. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us.

And shareholder returns are decent but not great. So you may want to delve deeper, because we don’t think the CEO pay is too low. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Journey Energy.

Important note: Journey Energy 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.