Mikhail Afendikov became the CEO of Cub Energy Inc. (CVE:KUB) in 2011, 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 Cub Energy.
See our latest analysis for Cub Energy
Comparing Cub Energy Inc.'s CEO Compensation With the industry
According to our data, Cub Energy Inc. has a market capitalization of CA$6.3m, and paid its CEO total annual compensation worth US$330k over the year to December 2019. That's mostly flat as compared to the prior year's compensation. It is worth noting that the CEO compensation consists entirely of the salary, worth US$330k.
On comparing similar-sized companies in the industry with market capitalizations below CA$258m, we found that the median total CEO compensation was US$232k. Accordingly, our analysis reveals that Cub Energy Inc. pays Mikhail Afendikov north of the industry median.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | US$330k | US$330k | 100% |
| Other | - | - | - |
| Total Compensation | US$330k | US$330k | 100% |
Speaking on an industry level, nearly 44% of total compensation represents salary, while the remainder of 56% is other remuneration. Speaking on a company level, Cub Energy prefers to tread along a traditional path, disbursing all compensation through a salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Cub Energy Inc.'s Growth
Over the last three years, Cub Energy Inc. has shrunk its earnings per share by 9.8% per year. It saw its revenue drop 64% over the last year.
Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Cub Energy Inc. Been A Good Investment?
Given the total shareholder loss of 33% over three years, many shareholders in Cub Energy Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
Cub Energy rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we noted earlier, Cub Energy pays its CEO higher than the norm for similar-sized companies belonging to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Cub Energy (2 are significant!) that you should be aware of before investing here.
Switching gears from Cub 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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About TSXV:KUB.H
Flawless balance sheet and good value.
