Yahoo Finance What Can We Learn About Cenovus Energy's (TSE:CVE) CEO Compensation?
Alex Pourbaix has been the CEO of Cenovus Energy Inc. (TSE:CVE) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Cenovus Energy pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Cenovus Energy
Comparing Cenovus Energy Inc.'s CEO Compensation With the industry
Our data indicates that Cenovus Energy Inc. has a market capitalization of CA$6.9b, and total annual CEO compensation was reported as CA$9.0m for the year to December 2019. Notably, that's an increase of 38% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$1.0m.
In comparison with other companies in the industry with market capitalizations ranging from CA$5.2b to CA$16b, the reported median CEO total compensation was CA$9.2m. From this we gather that Alex Pourbaix is paid around the median for CEOs in the industry. Furthermore, Alex Pourbaix directly owns CA$3.9m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2019 | 2018 | Proportion (2019) |
Salary | CA$1.0m | CA$1.0m | 11% |
Other | CA$8.0m | CA$5.6m | 89% |
Total Compensation | CA$9.0m | CA$6.6m | 100% |
On an industry level, around 47% of total compensation represents salary and 53% is other remuneration. Cenovus Energy sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Cenovus Energy Inc.'s Growth
Over the last three years, Cenovus Energy Inc. has shrunk its earnings per share by 45% per year. It saw its revenue drop 26% over the last year.
Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Cenovus Energy Inc. Been A Good Investment?
With a three year total loss of 55% for the shareholders, Cenovus Energy Inc. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
In Summary...
As previously discussed, Alex is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, EPS growth and total shareholder return have been negative 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.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Cenovus Energy that investors should be aware of in a dynamic business environment.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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