What We Learned About Arctic Hunter Energy's (CVE:AHU) CEO Pay

Tim Coupland became the CEO of Arctic Hunter Energy Inc. (CVE:AHU) in 2006, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Arctic Hunter Energy.

View our latest analysis for Arctic Hunter Energy

How Does Total Compensation For Tim Coupland Compare With Other Companies In The Industry?

At the time of writing, our data shows that Arctic Hunter Energy Inc. has a market capitalization of CA$4.4m, and reported total annual CEO compensation of CA$101k for the year to June 2020. That's just a smallish increase of 4.7% on last year. Notably, the salary of CA$101k is the entirety of the CEO compensation.

For comparison, other companies in the industry with market capitalizations below CA$254m, reported a median total CEO compensation of CA$265k. That is to say, Tim Coupland is paid under the industry median. What's more, Tim Coupland holds CA$374k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the broader industry, salary and other compensation roughly make up 50% each, of the total compensation. At the company level, Arctic Hunter Energy pays Tim Coupland solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Arctic Hunter Energy Inc.'s Growth Numbers

Arctic Hunter Energy Inc. has seen its earnings per share (EPS) increase by 18% a year over the past three years. It saw its revenue drop 93% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Arctic Hunter Energy Inc. Been A Good Investment?

Most shareholders would probably be pleased with Arctic Hunter Energy Inc. for providing a total return of 39% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Arctic Hunter Energy pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we noted earlier, Arctic Hunter Energy pays its CEO lower than the norm for similar-sized companies belonging to the same industry. When taking into account the company's strong EPS growth over the past three years, it appears CEO compensation is modest. Plus, we can't ignore the impressive shareholder returns, and won't be surprised if some shareholders were to reward such excellent all-around performance with a raise.

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 3 warning signs for Arctic Hunter Energy that investors should think about before committing capital to this stock.

Switching gears from Arctic Hunter Energy, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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