We Think NuVista Energy Ltd.'s (TSE:NVA) CEO Compensation Looks Fair

Key Insights

• NuVista Energy to hold its Annual General Meeting on 7th of May
• CEO Jonathan Wright's total compensation includes salary of CA$515.0k
• Total compensation is similar to the industry average
• NuVista Energy's EPS grew by 11% over the past three years while total shareholder return over the past three years was 412%

The performance at NuVista Energy Ltd. (TSE:NVA) has been quite strong recently and CEO Jonathan Wright has played a role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 7th of May. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

Check out our latest analysis for NuVista Energy

How Does Total Compensation For Jonathan Wright Compare With Other Companies In The Industry?

At the time of writing, our data shows that NuVista Energy Ltd. has a market capitalization of CA$2.6b, and reported total annual CEO compensation of CA$3.3m for the year to December 2023. That's a notable increase of 17% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$515k.

In comparison with other companies in the Canadian Oil and Gas industry with market capitalizations ranging from CA$1.4b to CA$4.4b, the reported median CEO total compensation was CA$3.3m. So it looks like NuVista Energy compensates Jonathan Wright in line with the median for the industry. Moreover, Jonathan Wright also holds CA$10m worth of NuVista Energy stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	CA$515k	CA$479k	15%
Other	CA$2.8m	CA$2.4m	85%
Total Compensation	CA$3.3m	CA$2.8m	100%

Speaking on an industry level, nearly 37% of total compensation represents salary, while the remainder of 63% is other remuneration. NuVista Energy pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

NuVista Energy Ltd.'s Growth

Over the past three years, NuVista Energy Ltd. has seen its earnings per share (EPS) grow by 11% per year. In the last year, its revenue is down 18%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has NuVista Energy Ltd. Been A Good Investment?

We think that the total shareholder return of 412%, over three years, would leave most NuVista Energy Ltd. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

Whatever your view on compensation, you might want to check if insiders are buying or selling NuVista Energy shares (free trial).

Switching gears from NuVista 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.