Is Zargon Oil & Gas Ltd (TSE:ZAR) Excessively Paying Its CEO?

Craig Hansen has been the CEO of Zargon Oil & Gas Ltd (TSE:ZAR) since 1993. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Zargon Oil & Gas

How Does Craig Hansen’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Zargon Oil & Gas Ltd has a market cap of CA$6m, and is paying total annual CEO compensation of CA$313k. We note that’s an increase of 11% above last year. We examined a group of similar sized companies, with market capitalizations of below CA$262m. The median CEO compensation in that group is CA$157k.

Thus we can conclude that Craig Hansen receives more in total compensation than the median of a group of companies in the same market, and of similar size to Zargon Oil & Gas 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, below, how CEO compensation at Zargon Oil & Gas has changed over time.

TSX:ZAR CEO Compensation October 23rd 18
TSX:ZAR CEO Compensation October 23rd 18

Is Zargon Oil & Gas Ltd Growing?

Zargon Oil & Gas Ltd has increased its earnings per share (EPS) by an average of 53% a year, over the last three years Its revenue is down -8.4% over last year.

This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business.

Although we don’t have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Zargon Oil & Gas Ltd Been A Good Investment?

With a three year total loss of 85%, Zargon Oil & Gas Ltd would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

We compared total CEO remuneration at Zargon Oil & Gas Ltd with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. This contrasts with the growth in CEO remuneration, in the last year. Considering the per share profit growth, but keeping in mind the weak returns, we’d need more time to form a view on CEO compensation. Shareholders may want to check for free if Zargon Oil & Gas Ltd insiders are buying or selling shares.

Or you might prefer examine intently this intuitive graph showing past earnings and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.