Is US Energy Corp’s (NASDAQ:USEG) CEO Pay Fair?

David Veltri became the CEO of US Energy Corp (NASDAQ:USEG) in 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for U.S. Energy

How Does David Veltri’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that US Energy Corp has a market cap of US$11m, and is paying total annual CEO compensation of US$394k. (This number is for the twelve months until 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$359k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$292k.

Thus we can conclude that David Veltri receives more in total compensation than the median of a group of companies in the same market, and of similar size to US Energy Corp. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. Take a look at U.S. Energy’s growth trajectory by checking out this more detailed historical graph of earnings, revenue and cash flow.

The graphic below shows how CEO compensation at U.S. Energy has changed from year to year.

NasdaqCM:USEG CEO Compensation December 7th 18
NasdaqCM:USEG CEO Compensation December 7th 18

Is US Energy Corp Growing?

On average over the last three years, US Energy Corp has grown earnings per share (EPS) by 112% each year. Revenue was pretty flat on last year.

This demonstrates that the company has been improving recently. A good result. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions.

Has US Energy Corp Been A Good Investment?

US Energy Corp has generated a total shareholder return of 12% over three years, so most shareholders would be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.

In Summary…

We compared the total CEO remuneration paid by US Energy Corp, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However, the earnings per share growth over three years is certainly impressive. Looking at the same time period, we think that the shareholder returns are respectable. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we’d recommend further research on management. So you may want to check if insiders are buying US Energy shares with their own money (free access).

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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.