Does PrairieSky Royalty Ltd.’s (TSE:PSK) CEO Pay Reflect Performance?

Andrew Phillips became the CEO of PrairieSky Royalty Ltd. (TSE:PSK) in 2014. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. 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.

See our latest analysis for PrairieSky Royalty

How Does Andrew Phillips’s Compensation Compare With Similar Sized Companies?

Our data indicates that PrairieSky Royalty Ltd. is worth CA$4.2b, and total annual CEO compensation is CA$4.3m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at CA$550k. We examined companies with market caps from CA$2.6b to CA$8.4b, and discovered that the median CEO total compensation of that group was CA$4.0m.

That means Andrew Phillips receives fairly typical remuneration for the CEO of a company that size. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at PrairieSky Royalty has changed from year to year.

TSX:PSK CEO Compensation, July 24th 2019
TSX:PSK CEO Compensation, July 24th 2019

Is PrairieSky Royalty Ltd. Growing?

Over the last three years PrairieSky Royalty Ltd. has grown its earnings per share (EPS) by an average of 39% per year (using a line of best fit). Its revenue is down -4.3% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important.

Has PrairieSky Royalty Ltd. Been A Good Investment?

Since shareholders would have lost about 21% over three years, some PrairieSky Royalty Ltd. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

Andrew Phillips is paid around the same as most CEOs of similar size companies.

We think that the EPS growth is very pleasing, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the the positives we don’t think the CEO pays is too high, but it’s certainly hard to argue it is too low. Shareholders may want to check for free if PrairieSky Royalty insiders are buying or selling shares.

If you want to buy a stock that is better than PrairieSky Royalty, this free list of high return, low debt companies is a great place to look.

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 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.