Here's Why Shareholders Should Examine Kolibri Global Energy Inc.'s (TSE:KEI) CEO Compensation Package More Closely

Kolibri Global Energy Inc. (TSE:KEI) has not performed well recently and CEO Wolf Regener will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 28 July 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Kolibri Global Energy

Comparing Kolibri Global Energy Inc.'s CEO Compensation With the industry

Our data indicates that Kolibri Global Energy Inc. has a market capitalization of CA$20m, and total annual CEO compensation was reported as US$326k for the year to December 2020. Notably, that's a decrease of 16% over the year before. It is worth noting that the CEO compensation consists entirely of the salary, worth US$326k.

In comparison with other companies in the industry with market capitalizations under CA$251m, the reported median total CEO compensation was US$195k. Hence, we can conclude that Wolf Regener is remunerated higher than the industry median. What's more, Wolf Regener holds CA$200k worth of shares in the company in their own name.

Component	2020	2019	Proportion (2020)
Salary	US$326k	US$387k	100%
Other	-	-	-
Total Compensation	US$326k	US$387k	100%

Talking in terms of the broader industry, salary and other compensation roughly make up 50% each, of the total compensation. Speaking on a company level, Kolibri Global Energy prefers to tread along a traditional path, disbursing all compensation through a salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Kolibri Global Energy Inc.'s Growth

Kolibri Global Energy Inc. has reduced its earnings per share by 91% a year over the last three years. It saw its revenue drop 39% over the last year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Kolibri Global Energy Inc. Been A Good Investment?

Few Kolibri Global Energy Inc. shareholders would feel satisfied with the return of -80% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Kolibri Global Energy rewards its CEO solely through a salary, ignoring non-salary benefits completely. Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Kolibri Global Energy (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Switching gears from Kolibri Global Energy, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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