Marc England has been the CEO of Genesis Energy Limited (NZSE:GNE) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Genesis Energy pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Genesis Energy
Comparing Genesis Energy Limited's CEO Compensation With the industry
According to our data, Genesis Energy Limited has a market capitalization of NZ$3.4b, and paid its CEO total annual compensation worth NZ$2.1m over the year to June 2020. That's a notable decrease of 12% on last year. In particular, the salary of NZ$1.23m, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the same industry with market capitalizations ranging between NZ$1.4b and NZ$4.6b had a median total CEO compensation of NZ$1.1m. Hence, we can conclude that Marc England is remunerated higher than the industry median. Furthermore, Marc England directly owns NZ$1.5m worth of shares in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | NZ$1.2m | NZ$1.2m | 59% |
| Other | NZ$845k | NZ$1.2m | 41% |
| Total Compensation | NZ$2.1m | NZ$2.4m | 100% |
On an industry level, roughly 43% of total compensation represents salary and 57% is other remuneration. It's interesting to note that Genesis Energy pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Genesis Energy Limited's Growth
Genesis Energy Limited has reduced its earnings per share by 28% a year over the last three years. It saw its revenue drop 4.0% over the last year.
The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Genesis Energy Limited Been A Good Investment?
Boasting a total shareholder return of 74% over three years, Genesis Energy Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
To Conclude...
As we touched on above, Genesis Energy Limited 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.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Genesis Energy that investors should look into moving forward.
Important note: Genesis Energy is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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