Here's Why Shareholders Will Not Be Complaining About Hemisphere Energy Corporation's (CVE:HME) CEO Pay Packet

It would be hard to discount the role that CEO Don Simmons has played in delivering the impressive results at Hemisphere Energy Corporation (CVE:HME) recently. Shareholders will have this at the front of their minds in the upcoming AGM on 15 June 2021. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

See our latest analysis for Hemisphere Energy

Comparing Hemisphere Energy Corporation's CEO Compensation With the industry

At the time of writing, our data shows that Hemisphere Energy Corporation has a market capitalization of CA$54m, and reported total annual CEO compensation of CA$318k for the year to December 2020. That's a notable decrease of 13% on last year. In particular, the salary of CA$240.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below CA$242m, reported a median total CEO compensation of CA$245k. So it looks like Hemisphere Energy compensates Don Simmons in line with the median for the industry. What's more, Don Simmons holds CA$1.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	CA$240k	CA$228k	76%
Other	CA$78k	CA$135k	24%
Total Compensation	CA$318k	CA$363k	100%

On an industry level, roughly 54% of total compensation represents salary and 46% is other remuneration. Hemisphere Energy is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Hemisphere Energy Corporation's Growth Numbers

Hemisphere Energy Corporation has seen its earnings per share (EPS) increase by 67% a year over the past three years. Its revenue is down 26% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Hemisphere Energy Corporation Been A Good Investment?

Most shareholders would probably be pleased with Hemisphere Energy Corporation for providing a total return of 135% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 5 warning signs for Hemisphere Energy (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Hemisphere 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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