Fletcher Brand is the CEO of Global Energy Ventures Ltd. (ASX:GEV), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether Global Energy Ventures pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Fletcher Brand Compare With Other Companies In The Industry?
At the time of writing, our data shows that Global Energy Ventures Ltd. has a market capitalization of AU$36m, and reported total annual CEO compensation of AU$450k for the year to June 2020. That's a notable decrease of 16% on last year. We note that the salary portion, which stands at AU$244.6k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under AU$282m, the reported median total CEO compensation was AU$358k. From this we gather that Fletcher Brand is paid around the median for CEOs in the industry. Furthermore, Fletcher Brand directly owns AU$2.1m worth of shares in the company, implying that they are deeply invested in the company's success.
Speaking on an industry level, nearly 76% of total compensation represents salary, while the remainder of 24% is other remuneration. Global Energy Ventures sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Global Energy Ventures Ltd.'s Growth Numbers
Over the past three years, Global Energy Ventures Ltd. has seen its earnings per share (EPS) grow by 46% per year. Its revenue is up 35% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Global Energy Ventures Ltd. Been A Good Investment?
Since shareholders would have lost about 64% over three years, some Global Energy Ventures Ltd. investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we touched on above, Global Energy Ventures Ltd. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, the company has logged negative shareholder returns over the previous three years. However, EPS growth is positive over the same time frame. Considering positive EPS growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 4 warning signs for Global Energy Ventures (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.
Important note: Global Energy Ventures 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.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email firstname.lastname@example.org.