We Think Shareholders May Want To Consider A Review Of NuVista Energy Ltd.'s (TSE:NVA) CEO Compensation Package

NuVista Energy Ltd. (TSE:NVA) has not performed well recently and CEO Jonathan Wright 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 11 May 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for NuVista Energy

Comparing NuVista Energy Ltd.'s CEO Compensation With the industry

According to our data, NuVista Energy Ltd. has a market capitalization of CA$544m, and paid its CEO total annual compensation worth CA$1.5m over the year to December 2020. Notably, that's a decrease of 18% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$410k.

On comparing similar companies from the same industry with market caps ranging from CA$246m to CA$986m, we found that the median CEO total compensation was CA$845k. This suggests that Jonathan Wright is paid more than the median for the industry. Moreover, Jonathan Wright also holds CA$1.9m 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	2020	2019	Proportion (2020)
Salary	CA$410k	CA$455k	28%
Other	CA$1.0m	CA$1.3m	72%
Total Compensation	CA$1.5m	CA$1.8m	100%

On an industry level, roughly 51% of total compensation represents salary and 49% 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.

A Look at NuVista Energy Ltd.'s Growth Numbers

NuVista Energy Ltd. has reduced its earnings per share by 110% a year over the last three years. In the last year, its revenue is down 27%.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has NuVista Energy Ltd. Been A Good Investment?

The return of -72% over three years would not have pleased NuVista Energy Ltd. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for NuVista Energy that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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