What We Learned About Altura Energy's (CVE:ATU) CEO Compensation

Simply Wall St
November 05, 2020

David Burghardt has been the CEO of Altura Energy Inc. (CVE:ATU) since 2015, 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 Altura Energy.

See our latest analysis for Altura Energy

Comparing Altura Energy Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that Altura Energy Inc. has a market capitalization of CA$12m, and reported total annual CEO compensation of CA$238k for the year to December 2019. That's a notable decrease of 13% on last year. In particular, the salary of CA$197.3k, 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$263m, we found that the median total CEO compensation was CA$347k. That is to say, David Burghardt is paid under the industry median. Furthermore, David Burghardt directly owns CA$349k worth of shares in the company.

Component20192018Proportion (2019)
Salary CA$197k CA$183k 83%
Other CA$41k CA$91k 17%
Total CompensationCA$238k CA$273k100%

On an industry level, around 45% of total compensation represents salary and 55% is other remuneration. Altura Energy pays out 83% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

TSXV:ATU CEO Compensation November 5th 2020

A Look at Altura Energy Inc.'s Growth Numbers

Altura Energy Inc. has reduced its earnings per share by 121% a year over the last three years. Its revenue is down 29% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Altura Energy Inc. Been A Good Investment?

Since shareholders would have lost about 74% over three years, some Altura Energy Inc. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As previously discussed, David is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Over the last three years, shareholder returns have been downright disappointing, and EPSgrowth has been equally disappointing. We can't say the CEO compensation is high, but shareholders will be cold to a bump at this stage, considering negative investor returns.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 2 which don't sit too well with us) in Altura Energy we think you should know about.

Important note: Altura Energy is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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