How Should Investors Feel About Peyto Exploration & Development Corp.’s (TSE:PEY) CEO Pay?

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Darren Gee has been the CEO of Peyto Exploration & Development Corp. (TSE:PEY) since 1970. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Peyto Exploration & Development

How Does Darren Gee’s Compensation Compare With Similar Sized Companies?

According to our data, Peyto Exploration & Development Corp. has a market capitalization of CA$777m, and pays its CEO total annual compensation worth CA$2.2m. (This is based on the year to December 2018). That’s below the compensation, last year. While we always look at total compensation first, we note that the salary component is less, at CA$285k. We looked at a group of companies with market capitalizations from CA$270m to CA$1.1b, and the median CEO total compensation was CA$1.4m.

As you can see, Darren Gee is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Peyto Exploration & Development Corp. 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, below, how CEO compensation at Peyto Exploration & Development has changed over time.

TSX:PEY CEO Compensation, June 1st 2019
TSX:PEY CEO Compensation, June 1st 2019

Is Peyto Exploration & Development Corp. Growing?

Over the last three years Peyto Exploration & Development Corp. has grown its earnings per share (EPS) by an average of 4.3% per year (using a line of best fit). In the last year, its revenue is down -26%.

I generally like to see a little revenue growth, but it is good to see EPS growth. In conclusion we can’t form a strong opinion about business performance yet; but it’s one worth watching. It could be important to check this free visual depiction of what analysts expect for the future.

Has Peyto Exploration & Development Corp. Been A Good Investment?

With a three year total loss of 84%, Peyto Exploration & Development Corp. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We compared the total CEO remuneration paid by Peyto Exploration & Development Corp., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Although we’d stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Peyto Exploration & Development (free visualization of insider trades).

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

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.