In 2015 Toby Pierce was appointed CEO of TAG Oil Ltd. (TSE:TAO). 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Toby Pierce’s Compensation Compare With Similar Sized Companies?
Our data indicates that TAG Oil Ltd. is worth CA$31m, and total annual CEO compensation is CA$270k. (This figure is for the year to March 2018). We think total compensation is more important but we note that the CEO salary is lower, at CA$240k. We took a group of companies with market capitalizations below CA$268m, and calculated the median CEO total compensation to be CA$142k.
As you can see, Toby Pierce is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean TAG Oil Ltd. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at TAG Oil has changed over time.
Is TAG Oil Ltd. Growing?
TAG Oil Ltd. has increased its earnings per share (EPS) by an average of 64% a year, over the last three years (using a line of best fit). Its revenue is up 33% 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. We don’t have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has TAG Oil Ltd. Been A Good Investment?
With a three year total loss of 58%, TAG Oil Ltd. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared the total CEO remuneration paid by TAG Oil Ltd., 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.
However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. While EPS is positive, we’d say shareholders would want better returns before the CEO is paid much more. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at TAG Oil.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.