Is Yangarra Resources Ltd.’s (TSE:YGR) CEO Pay Justified?

Jim Evaskevich has been the CEO of Yangarra Resources Ltd. (TSE:YGR) since 2001. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Yangarra Resources

How Does Jim Evaskevich’s Compensation Compare With Similar Sized Companies?

Our data indicates that Yangarra Resources Ltd. is worth CA$119m, and total annual CEO compensation is CA$2.9m. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at CA$264k. We took a group of companies with market capitalizations below CA$266m, and calculated the median CEO total compensation to be CA$138k.

Thus we can conclude that Jim Evaskevich receives more in total compensation than the median of a group of companies in the same market, and of similar size to Yangarra Resources Ltd.. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Yangarra Resources, below.

TSX:YGR CEO Compensation, August 19th 2019
TSX:YGR CEO Compensation, August 19th 2019

Is Yangarra Resources Ltd. Growing?

On average over the last three years, Yangarra Resources Ltd. has grown earnings per share (EPS) by 60% each year (using a line of best fit). In the last year, its revenue is up 48%.

This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see.

Has Yangarra Resources Ltd. Been A Good Investment?

With a total shareholder return of 16% over three years, Yangarra Resources Ltd. shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary…

We compared the total CEO remuneration paid by Yangarra Resources Ltd., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. We also note that, over the same time frame, shareholder returns haven’t been bad. While it may be worth researching further, we don’t see a problem with the CEO pay, given the good EPS growth. So you may want to check if insiders are buying Yangarra Resources shares with their own money (free access).

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.