We Think Total Energy Services Inc.'s (TSE:TOT) CEO Compensation Package Needs To Be Put Under A Microscope

Shareholders will probably not be too impressed with the underwhelming results at Total Energy Services Inc. (TSE:TOT) recently. At the upcoming AGM on 18 May 2021, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Total Energy Services

Comparing Total Energy Services Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that Total Energy Services Inc. has a market capitalization of CA$178m, and reported total annual CEO compensation of CA$465k for the year to December 2020. Notably, that's a decrease of 22% over the year before. Notably, the salary which is CA$244.1k, represents a considerable chunk of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below CA$242m, we found that the median total CEO compensation was CA$613k. So it looks like Total Energy Services compensates Dan Halyk in line with the median for the industry. Furthermore, Dan Halyk directly owns CA$8.9m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	CA$244k	CA$275k	53%
Other	CA$221k	CA$325k	47%
Total Compensation	CA$465k	CA$600k	100%

On an industry level, roughly 39% of total compensation represents salary and 61% is other remuneration. According to our research, Total Energy Services has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Total Energy Services Inc.'s Growth Numbers

Total Energy Services Inc. has reduced its earnings per share by 66% a year over the last three years. It saw its revenue drop 52% over the last year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Total Energy Services Inc. Been A Good Investment?

With a total shareholder return of -67% over three years, Total Energy Services Inc. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Total Energy Services that investors should look into moving forward.

Switching gears from Total Energy Services, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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