Is Ascendant Resources Inc.'s (TSE:ASND) CEO Pay Justified?

By
Simply Wall St
Published
April 16, 2020
TSX:ASND

Chris Buncic has been the CEO of Ascendant Resources Inc. (TSE:ASND) since 2013. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Ascendant Resources

How Does Chris Buncic's Compensation Compare With Similar Sized Companies?

According to our data, Ascendant Resources Inc. has a market capitalization of CA$11m, and paid its CEO total annual compensation worth US$513k over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$257k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$156k.

Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Speaking on an industry level, we can see that nearly 92% of total compensation represents salary, while the remainder of 8.4% is other remuneration. It's interesting to note that Ascendant Resources allocates a smaller portion of compensation to salary in comparison to the broader industry.

As you can see, Chris Buncic is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Ascendant Resources Inc. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. You can see a visual representation of the CEO compensation at Ascendant Resources, below.

TSX:ASND CEO Compensation April 16th 2020
TSX:ASND CEO Compensation April 16th 2020

Is Ascendant Resources Inc. Growing?

Over the last three years Ascendant Resources Inc. has seen earnings per share (EPS) move in a positive direction by an average of 58% per year (using a line of best fit). In the last year, its revenue is down 9.7%.

This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. It could be important to check this free visual depiction of what analysts expect for the future.

Has Ascendant Resources Inc. Been A Good Investment?

With a three year total loss of 80%, Ascendant Resources Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared the total CEO remuneration paid by Ascendant Resources Inc., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

However we must not forget that the EPS growth has been very strong over three years. However, the returns to investors are far less impressive, over the same period. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Taking a breather from CEO compensation, we've spotted 4 warning signs for Ascendant Resources (of which 2 are significant!) you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

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