Is Tourmaline Oil Corp.’s (TSE:TOU) CEO Pay Justified?

Mike Rose has been the CEO of Tourmaline Oil Corp. (TSE:TOU) since 2008. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Tourmaline Oil

How Does Mike Rose’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Tourmaline Oil Corp. has a market cap of CA$4.1b, and is paying total annual CEO compensation of CA$3.2m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at CA$600k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CA$2.6b to CA$8.5b. The median total CEO compensation was CA$4.1m.

So Mike Rose is paid around the average of the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.

You can see a visual representation of the CEO compensation at Tourmaline Oil, below.

TSX:TOU CEO Compensation, August 5th 2019
TSX:TOU CEO Compensation, August 5th 2019

Is Tourmaline Oil Corp. Growing?

Over the last three years Tourmaline Oil Corp. has grown its earnings per share (EPS) by an average of 64% per year (using a line of best fit). Its revenue is up 5.4% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see modest revenue growth, suggesting the underlying business is healthy.

Has Tourmaline Oil Corp. Been A Good Investment?

Since shareholders would have lost about 56% over three years, some Tourmaline Oil Corp. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

Mike Rose is paid around the same as most CEOs of similar size companies.

We’d say the company can boast of its EPS growth, but we find the returns over the last three years to be lacking. We’d be surprised if shareholders want to see a pay rise for the CEO, but we’d stop short of calling their pay too generous. So you may want to check if insiders are buying Tourmaline Oil shares with their own money (free access).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.