Stock Analysis

We Think Shareholders Are Less Likely To Approve A Large Pay Rise For PHX Minerals Inc.'s (NYSE:PHX) CEO For Now

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In the past three years, the share price of PHX Minerals Inc. (NYSE:PHX) has struggled to grow and now shareholders are sitting on a loss. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. Shareholders will have a chance to take their concerns to the board at the next AGM on 02 March 2022 and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

View our latest analysis for PHX Minerals

How Does Total Compensation For Chad Stephens Compare With Other Companies In The Industry?

Our data indicates that PHX Minerals Inc. has a market capitalization of US$80m, and total annual CEO compensation was reported as US$1.3m for the year to September 2021. That's a notable increase of 11% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$345k.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$299k. Accordingly, our analysis reveals that PHX Minerals Inc. pays Chad Stephens north of the industry median. Furthermore, Chad Stephens directly owns US$1.1m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20212020Proportion (2021)
Salary US$345k US$419k 26%
Other US$991k US$790k 74%
Total CompensationUS$1.3m US$1.2m100%

On an industry level, roughly 21% of total compensation represents salary and 79% is other remuneration. According to our research, PHX Minerals has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

NYSE:PHX CEO Compensation February 24th 2022

A Look at PHX Minerals Inc.'s Growth Numbers

Over the last three years, PHX Minerals Inc. has shrunk its earnings per share by 66% per year. Its revenue is up 102% over the last year.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 PHX Minerals Inc. Been A Good Investment?

With a total shareholder return of -85% over three years, PHX Minerals Inc. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 5 warning signs (and 1 which is a bit unpleasant) in PHX Minerals we think you should know about.

Important note: PHX Minerals 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.

Valuation is complex, but we're helping make it simple.

Find out whether PHX Minerals is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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