How Does Orogen Royalties' (CVE:OGN) CEO Pay Compare With Company Performance?

Paddy Nicol became the CEO of Orogen Royalties Inc. (CVE:OGN) in 2010, 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 Orogen Royalties.

Check out our latest analysis for Orogen Royalties

How Does Total Compensation For Paddy Nicol Compare With Other Companies In The Industry?

At the time of writing, our data shows that Orogen Royalties Inc. has a market capitalization of CA$52m, and reported total annual CEO compensation of CA$293k for the year to December 2019. We note that's a decrease of 14% compared to last year. We note that the salary portion, which stands at CA$240.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below CA$256m, we found that the median total CEO compensation was CA$152k. This suggests that Paddy Nicol is paid more than the median for the industry.

On an industry level, around 89% of total compensation represents salary and 11% is other remuneration. Orogen Royalties is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Orogen Royalties Inc.'s Growth

Over the last three years, Orogen Royalties Inc. has shrunk its earnings per share by 74% per year. Its revenue is down 94% over the previous year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Orogen Royalties Inc. Been A Good Investment?

Most shareholders would probably be pleased with Orogen Royalties Inc. for providing a total return of 43% 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...

As we touched on above, Orogen Royalties Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. We're not seeing great strides in EPS, but the company has clearly pleased some investors, given the returns over the last three years. Considering positive investor returns, it would be bold of us to criticize CEO compensation, but shareholders might want to see healthier EPS growth before a raise is given out.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 5 warning signs for Orogen Royalties (3 shouldn't be ignored!) that you should be aware of before investing here.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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