Yahoo Finance We Think The Compensation For Nostra Terra Oil and Gas Company plc's (LON:NTOG) CEO Looks About Right
The performance at Nostra Terra Oil and Gas Company plc (LON:NTOG) has been rather lacklustre of late and shareholders may be wondering what CEO Matt Lofgran is planning to do about this. At the next AGM coming up on 05 July 2021, they can influence managerial decision making through voting on resolutions, including executive remuneration. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.
See our latest analysis for Nostra Terra Oil and Gas
How Does Total Compensation For Matt Lofgran Compare With Other Companies In The Industry?
Our data indicates that Nostra Terra Oil and Gas Company plc has a market capitalization of UK£3.5m, and total annual CEO compensation was reported as US$228k for the year to December 2020. Notably, that's a decrease of 9.8% over the year before. In particular, the salary of US$205.0k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the industry with market capitalizations below UK£144m, we found that the median total CEO compensation was US$370k. This suggests that Matt Lofgran is paid below the industry median. Furthermore, Matt Lofgran directly owns UK£193k worth of shares in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$205k | US$250k | 90% |
Other | US$23k | US$2.2k | 10% |
Total Compensation | US$228k | US$252k | 100% |
Speaking on an industry level, nearly 76% of total compensation represents salary, while the remainder of 24% is other remuneration. It's interesting to note that Nostra Terra Oil and Gas pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Nostra Terra Oil and Gas Company plc's Growth
Over the past three years, Nostra Terra Oil and Gas Company plc has seen its earnings per share (EPS) grow by 31% per year. It saw its revenue drop 43% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Nostra Terra Oil and Gas Company plc Been A Good Investment?
The return of -86% over three years would not have pleased Nostra Terra Oil and Gas Company plc shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
The fact that shareholders have earned a negative share price return is certainly disconcerting. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. There needs to be more focus by management and the board to examine why the share price has diverged from fundamentals. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 5 warning signs for Nostra Terra Oil and Gas (4 are a bit concerning!) that you should be aware of before investing here.
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.
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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