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Should You Worry About Europa Oil & Gas (Holdings) plc's (LON:EOG) CEO Salary Level?

Simply Wall St

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In 2011 Hugh G. Mackay was appointed CEO of Europa Oil & Gas (Holdings) plc (LON:EOG). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Europa Oil & Gas (Holdings)

How Does Hugh G. Mackay's Compensation Compare With Similar Sized Companies?

According to our data, Europa Oil & Gas (Holdings) plc has a market capitalization of UK£10m, and pays its CEO total annual compensation worth UK£187k. (This figure is for the year to July 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£163k. We examined a group of similar sized companies, with market capitalizations of below UK£159m. The median CEO total compensation in that group is UK£245k.

So Hugh G. Mackay is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at Europa Oil & Gas (Holdings) has changed from year to year.

AIM:EOG CEO Compensation, July 5th 2019

Is Europa Oil & Gas (Holdings) plc Growing?

Over the last three years Europa Oil & Gas (Holdings) plc has shrunk its earnings per share by an average of 10% per year (measured with a line of best fit). It achieved revenue growth of 12% over the last year.

Unfortunately, earnings per share have trended lower over the last three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has Europa Oil & Gas (Holdings) plc Been A Good Investment?

Given the total loss of 39% over three years, many shareholders in Europa Oil & Gas (Holdings) plc are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Hugh G. Mackay is paid around the same as most CEOs of similar size companies.

The company isn't growing EPS, and shareholder returns have been disappointing. Suffice it to say, we don't think the CEO is underpaid! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Europa Oil & Gas (Holdings).

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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.