A Quick Analysis On Nostra Terra Oil and Gas' (LON:NTOG) CEO Compensation

Matt Lofgran became the CEO of Nostra Terra Oil and Gas Company plc (LON:NTOG) in 2009, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Nostra Terra Oil and Gas

How Does Total Compensation For Matt Lofgran Compare With Other Companies In The Industry?

At the time of writing, our data shows that Nostra Terra Oil and Gas Company plc has a market capitalization of UK£2.2m, and reported total annual CEO compensation of US$252k for the year to December 2019. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at US$250.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below UK£150m, reported a median total CEO compensation of US$382k. This suggests that Matt Lofgran is paid below the industry median. Moreover, Matt Lofgran also holds UK£148k worth of Nostra Terra Oil and Gas stock directly under their own name.

On an industry level, around 66% of total compensation represents salary and 34% is other remuneration. Nostra Terra Oil and Gas has gone down a largely traditional route, paying Matt Lofgran a high salary, giving it preference over non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Nostra Terra Oil and Gas Company plc's Growth Numbers

Nostra Terra Oil and Gas Company plc has seen its earnings per share (EPS) increase by 52% a year over the past three years. It saw its revenue drop 39% over the last 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. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Nostra Terra Oil and Gas Company plc Been A Good Investment?

Since shareholders would have lost about 87% over three years, some Nostra Terra Oil and Gas Company plc investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Nostra Terra Oil and Gas pays its CEO a majority of compensation through a salary. As we noted earlier, Nostra Terra Oil and Gas pays its CEO lower than the norm for similar-sized companies belonging to the same industry. However we must not forget that the EPS growth has been very strong over three years. Considering EPS are on the up, we would say Matt is compensated fairly. But shareholders will likely want to hold off on any raise for Matt until investor returns are positive.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 5 warning signs for Nostra Terra Oil and Gas (of which 3 are potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Nostra Terra Oil and Gas, 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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