Is Parkland Fuel Corporation’s (TSE:PKI) CEO Paid Enough Relative To Peers?

In 2011 Bob Espey was appointed CEO of Parkland Fuel Corporation (TSE:PKI). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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.

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View our latest analysis for Parkland Fuel

How Does Bob Espey’s Compensation Compare With Similar Sized Companies?

According to our data, Parkland Fuel Corporation has a market capitalization of CA$5.8b, and pays its CEO total annual compensation worth CA$3.8m. (This figure is for the year to December 2018). We note that’s an increase of 58% above last year. We think total compensation is more important but we note that the CEO salary is lower, at CA$778k. We examined companies with market caps from CA$2.7b to CA$8.6b, and discovered that the median CEO total compensation of that group was CA$4.1m.

So Bob Espey is paid around the average of the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

The graphic below shows how CEO compensation at Parkland Fuel has changed from year to year.

TSX:PKI CEO Compensation, May 24th 2019
TSX:PKI CEO Compensation, May 24th 2019

Is Parkland Fuel Corporation Growing?

On average over the last three years, Parkland Fuel Corporation has grown earnings per share (EPS) by 49% each year (using a line of best fit). Its revenue is up 38% over last year.

This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. It could be important to check this free visual depiction of what analysts expect for the future.

Has Parkland Fuel Corporation Been A Good Investment?

I think that the total shareholder return of 91%, over three years, would leave most Parkland Fuel Corporation shareholders smiling. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.

In Summary…

Bob Espey is paid around what is normal the leaders of comparable size companies.

Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Parkland Fuel (free visualization of insider trades).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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.

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