Does Barnwell Industries' (NYSEMKT:BRN) CEO Salary Compare Well With Industry Peers?

Simply Wall St
August 03, 2020

Alexander Kinzler became the CEO of Barnwell Industries, Inc. (NYSEMKT:BRN) in 2016, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Barnwell Industries.

View our latest analysis for Barnwell Industries

How Does Total Compensation For Alexander Kinzler Compare With Other Companies In The Industry?

At the time of writing, our data shows that Barnwell Industries, Inc. has a market capitalization of US$7.2m, and reported total annual CEO compensation of US$358k for the year to September 2019. Notably, that's a decrease of 26% over the year before. Notably, the salary which is US$321.7k, 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$649k. That is to say, Alexander Kinzler is paid under the industry median. What's more, Alexander Kinzler holds US$806k worth of shares in the company in their own name.

Component20192018Proportion (2019)
Salary US$322k US$380k 90%
Other US$37k US$101k 10%
Total CompensationUS$358k US$481k100%

Speaking on an industry level, nearly 17% of total compensation represents salary, while the remainder of 83% is other remuneration. Barnwell Industries pays out 90% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

AMEX:BRN CEO Compensation August 3rd 2020

A Look at Barnwell Industries, Inc.'s Growth Numbers

Over the last three years, Barnwell Industries, Inc. has shrunk its earnings per share by 92% per year. It achieved revenue growth of 44% over the last year.

Investors would be a bit wary of companies that have lower earnings 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. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Barnwell Industries, Inc. Been A Good Investment?

Since shareholders would have lost about 54% over three years, some Barnwell Industries, Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As previously discussed, Alexander is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. But poor shareholder returns earnings growth have hampered the company over the past three years. In contrast, revenues have increased more recently. So, although Alexander is modestly paid, shareholders might want to see positive shareholder returns before warming to the idea of a raise.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 4 warning signs for Barnwell Industries you should be aware of, and 3 of them are concerning.

Important note: Barnwell Industries 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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