Yahoo Finance How Should Investors React To Precision Drilling Corporation's (TSE:PD) CEO Pay?
In 2007 Kevin Neveu was appointed CEO of Precision Drilling Corporation (TSE:PD). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Precision Drilling
How Does Kevin Neveu's Compensation Compare With Similar Sized Companies?
According to our data, Precision Drilling Corporation has a market capitalization of CA$529m, and pays its CEO total annual compensation worth CA$6.7m. (This is based on the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CA$1.0m. We looked at a group of companies with market capitalizations from CA$264m to CA$1.1b, and the median CEO total compensation was CA$1.3m.
As you can see, Kevin Neveu is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Precision Drilling Corporation is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Precision Drilling has changed over time.
Is Precision Drilling Corporation Growing?
Over the last three years Precision Drilling Corporation has grown its earnings per share (EPS) by an average of 16% per year (using a line of best fit). Its revenue is up 15% over last year.
This demonstrates that the company has been improving recently. A good result. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. It could be important to check this free visual depiction of what analysts expect for the future.
Has Precision Drilling Corporation Been A Good Investment?
Given the total loss of 64% over three years, many shareholders in Precision Drilling Corporation are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
We compared total CEO remuneration at Precision Drilling Corporation with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. However, the returns to investors are far less impressive, over the same period. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Precision Drilling.
Important note: Precision Drilling may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
