Pat Ward has been the CEO of Painted Pony Energy Ltd. (TSE:PONY) since 2007. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Pat Ward’s Compensation Compare With Similar Sized Companies?
According to our data, Painted Pony Energy Ltd. has a market capitalization of CA$306m, and pays its CEO total annual compensation worth CA$1.8m. (This figure is for the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at CA$450k. We looked at a group of companies with market capitalizations from CA$133m to CA$533m, and the median CEO total compensation was CA$813k.
It would therefore appear that Painted Pony Energy Ltd. pays Pat Ward more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Painted Pony Energy, below.
Is Painted Pony Energy Ltd. Growing?
On average over the last three years, Painted Pony Energy Ltd. has grown earnings per share (EPS) by 53% each year (using a line of best fit). In the last year, its revenue is up 63%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Shareholders might be interested in this free visualization of analyst forecasts.
Has Painted Pony Energy Ltd. Been A Good Investment?
Since shareholders would have lost about 59% over three years, some Painted Pony Energy Ltd. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
We examined the amount Painted Pony Energy Ltd. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. However, the returns to investors are far less impressive, over the same period. Considering the per share profit growth, but keeping in mind the weak returns, we’d need more time to form a view on CEO compensation. So you may want to check if insiders are buying Painted Pony Energy shares with their own money (free access).
Important note: Painted Pony Energy may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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If you spot an error that warrants correction, please contact the editor at email@example.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.