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In 2008 Grant Fagerheim was appointed CEO of Whitecap Resources Inc. (TSE:WCP). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Grant Fagerheim’s Compensation Compare With Similar Sized Companies?
According to our data, Whitecap Resources Inc. has a market capitalization of CA$1.8b, and pays its CEO total annual compensation worth CA$3.6m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at CA$425k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CA$1.3b to CA$4.2b. The median total CEO compensation was CA$2.7m.
It would therefore appear that Whitecap Resources Inc. pays Grant Fagerheim more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Whitecap Resources has changed over time.
Is Whitecap Resources Inc. Growing?
On average over the last three years, Whitecap Resources Inc. has grown earnings per share (EPS) by 40% each year (using a line of best fit). In the last year, its revenue is up 31%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly.
Has Whitecap Resources Inc. Been A Good Investment?
With a three year total loss of 49%, Whitecap Resources Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We examined the amount Whitecap Resources Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling Whitecap Resources shares (free trial).
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 email@example.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.