Yahoo Finance We Think Shareholders Are Less Likely To Approve A Large Pay Rise For New Zealand Oil & Gas Limited's (NZSE:NZO) CEO For Now
Shareholders of New Zealand Oil & Gas Limited (NZSE:NZO) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 01 November 2022. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
Check out our latest analysis for New Zealand Oil & Gas
How Does Total Compensation For Andrew Jefferies Compare With Other Companies In The Industry?
According to our data, New Zealand Oil & Gas Limited has a market capitalization of NZ$99m, and paid its CEO total annual compensation worth NZ$902k over the year to June 2022. That's just a smallish increase of 7.9% on last year. In particular, the salary of NZ$642.4k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under NZ$347m, the reported median total CEO compensation was NZ$417k. This suggests that Andrew Jefferies is paid more than the median for the industry.
Component | 2022 | 2021 | Proportion (2022) |
Salary | NZ$642k | NZ$593k | 71% |
Other | NZ$259k | NZ$243k | 29% |
Total Compensation | NZ$902k | NZ$836k | 100% |
Speaking on an industry level, nearly 53% of total compensation represents salary, while the remainder of 47% is other remuneration. New Zealand Oil & Gas is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at New Zealand Oil & Gas Limited's Growth Numbers
Over the past three years, New Zealand Oil & Gas Limited has seen its earnings per share (EPS) grow by 23% per year. In the last year, its revenue is up 133%.
Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has New Zealand Oil & Gas Limited Been A Good Investment?
With a total shareholder return of -36% over three years, New Zealand Oil & Gas Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for New Zealand Oil & Gas (1 is significant!) that you should be aware of before investing here.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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