Civeo Corporation's (NYSE:CVEO) CEO Compensation Is Looking A Bit Stretched At The Moment

By
Simply Wall St
Published
May 12, 2021
NYSE:CVEO
Source: Shutterstock

In the past three years, the share price of Civeo Corporation (NYSE:CVEO) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 19 May 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Civeo

Comparing Civeo Corporation's CEO Compensation With the industry

Our data indicates that Civeo Corporation has a market capitalization of US$237m, and total annual CEO compensation was reported as US$3.0m for the year to December 2020. We note that's a decrease of 32% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$633k.

In comparison with other companies in the industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$2.0m. Hence, we can conclude that Bradley Dodson is remunerated higher than the industry median. Moreover, Bradley Dodson also holds US$2.7m worth of Civeo stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary US$633k US$681k 21%
Other US$2.3m US$3.7m 79%
Total CompensationUS$3.0m US$4.4m100%

Speaking on an industry level, nearly 22% of total compensation represents salary, while the remainder of 78% is other remuneration. Civeo is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
NYSE:CVEO CEO Compensation May 13th 2021

A Look at Civeo Corporation's Growth Numbers

Civeo Corporation's earnings per share (EPS) grew 22% per year over the last three years. It saw its revenue drop 7.4% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Civeo Corporation Been A Good Investment?

With a total shareholder return of -61% over three years, Civeo Corporation shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for Civeo that investors should look into moving forward.

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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