Is Whitecap Resources Inc. (TSE:WCP) Overpaying Its CEO?

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. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Whitecap Resources

How Does Grant Fagerheim’s Compensation Compare With Similar Sized Companies?

According to our data, Whitecap Resources Inc. has a market capitalization of CA$2.0b, and pays its CEO total annual compensation worth CA$3.5m. (This number is for the twelve months until December 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at CA$297k. When we examined a selection of companies with market caps ranging from CA$1.3b to CA$4.2b, we found the median CEO compensation was CA$2.8m.

That means Grant Fagerheim receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

You can see, below, how CEO compensation at Whitecap Resources has changed over time.

TSX:WCP CEO Compensation, February 26th 2019
TSX:WCP CEO Compensation, February 26th 2019

Is Whitecap Resources Inc. Growing?

On average over the last three years, Whitecap Resources Inc. has grown earnings per share (EPS) by 52% each year (using a line of best fit). Its revenue is up 58% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Shareholders might be interested in this free visualization of analyst forecasts.

Has Whitecap Resources Inc. Been A Good Investment?

With a three year total loss of 31%, Whitecap Resources Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

Grant Fagerheim 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). 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. Whatever your view on compensation, you might want to check if insiders are buying or selling Whitecap Resources shares (free trial).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.