Brent Bilsland became the CEO of Hallador Energy Company (NASDAQ:HNRG) in 2014, 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.
How Does Total Compensation For Brent Bilsland Compare With Other Companies In The Industry?
According to our data, Hallador Energy Company has a market capitalization of US$25m, and paid its CEO total annual compensation worth US$680k over the year to December 2019. Notably, that's an increase of 25% over the year before. Notably, the salary which is US$385.0k, represents most of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$624k. This suggests that Hallador Energy remunerates its CEO largely in line with the industry average. What's more, Brent Bilsland holds US$1.0m worth of shares in the company in their own name.
On an industry level, around 16% of total compensation represents salary and 84% is other remuneration. Hallador Energy pays out 57% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Hallador Energy Company's Growth
Over the last three years, Hallador Energy Company has shrunk its earnings per share by 107% per year. In the last year, its revenue is down 16%.
The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Hallador Energy Company Been A Good Investment?
Given the total shareholder loss of 85% over three years, many shareholders in Hallador Energy Company are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
As we noted earlier, Hallador Energy pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for Hallador Energy you should be aware of, and 2 of them can't be ignored.
Important note: Hallador 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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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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