Is Pulse Seismic Inc.'s (TSE:PSD) CEO Pay Fair?

By
Simply Wall St
Published
May 21, 2019
TSX:PSD
Source: Shutterstock

Neal Coleman became the CEO of Pulse Seismic Inc. (TSE:PSD) in 2012. 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.

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View our latest analysis for Pulse Seismic

How Does Neal Coleman's Compensation Compare With Similar Sized Companies?

According to our data, Pulse Seismic Inc. has a market capitalization of CA$123m, and pays its CEO total annual compensation worth CA$441k. (This number is for the twelve months until December 2018). That's actually a decrease on the year before. While we always look at total compensation first, we note that the salary component is less, at CA$304k. We took a group of companies with market capitalizations below CA$269m, and calculated the median CEO total compensation to be CA$148k.

As you can see, Neal Coleman is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Pulse Seismic Inc. 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.

The graphic below shows how CEO compensation at Pulse Seismic has changed from year to year.

TSX:PSD CEO Compensation, May 21st 2019
TSX:PSD CEO Compensation, May 21st 2019

Is Pulse Seismic Inc. Growing?

Over the last three years Pulse Seismic Inc. has grown its earnings per share (EPS) by an average of 52% per year (using a line of best fit). In the last year, its revenue is down -69%.

This demonstrates that the company has been improving recently. A good result. Revenue growth is a real positive for growth, but ultimately profits are more important. You might want to check this free visual report on analyst forecasts for future earnings.

Has Pulse Seismic Inc. Been A Good Investment?

Pulse Seismic Inc. has not done too badly by shareholders, with a total return of 0.7%, over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

We compared the total CEO remuneration paid by Pulse Seismic Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. We also note that, over the same time frame, shareholder returns haven't been bad. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we'd recommend further research on management. So you may want to check if insiders are buying Pulse Seismic shares with their own money (free access).

Important note: Pulse Seismic 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.

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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