How Is Western Energy Services' (TSE:WRG) CEO Compensated?

By
Simply Wall St
Published
July 14, 2020
TSX:WRG

Alex R. MacAusland has been the CEO of Western Energy Services Corp. (TSE:WRG) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Western Energy Services.

See our latest analysis for Western Energy Services

How Does Total Compensation For Alex R. MacAusland Compare With Other Companies In The Industry?

Our data indicates that Western Energy Services Corp. has a market capitalization of CA$24m, and total annual CEO compensation was reported as CA$898k for the year to December 2019. That's a notable decrease of 17% on last year. In particular, the salary of CA$525.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below CA$271m, we found that the median total CEO compensation was CA$1.1m. From this we gather that Alex R. MacAusland is paid around the median for CEOs in the industry. Moreover, Alex R. MacAusland also holds CA$404k worth of Western Energy Services stock directly under their own name.

Component20192018Proportion (2019)
Salary CA$525k CA$525k 58%
Other CA$373k CA$556k 42%
Total CompensationCA$898k CA$1.1m100%

On an industry level, around 32% of total compensation represents salary and 68% is other remuneration. It's interesting to note that Western Energy Services pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
TSX:WRG CEO Compensation July 14th 2020

Western Energy Services Corp.'s Growth

Over the last three years, Western Energy Services Corp. has shrunk its earnings per share by 2.2% per year. In the last year, its revenue is down 17%.

Its a bit disappointing to see that the company has failed to grow its earnings. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Western Energy Services Corp. Been A Good Investment?

Given the total shareholder loss of 82% over three years, many shareholders in Western Energy Services Corp. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As previously discussed, Alex R. is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, earnings growth and total shareholder return have been negative for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

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. That's why we did some digging and identified 2 warning signs for Western Energy Services that you should be aware of before investing.

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.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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