Michael Binnion became the CEO of Questerre Energy Corporation (TSE:QEC) in 2000, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Questerre Energy Corporation's CEO Compensation With the industry
At the time of writing, our data shows that Questerre Energy Corporation has a market capitalization of CA$45m, and reported total annual CEO compensation of CA$647k for the year to December 2019. That's a notable increase of 18% on last year. In particular, the salary of CA$324.5k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below CA$266m, reported a median total CEO compensation of CA$353k. Hence, we can conclude that Michael Binnion is remunerated higher than the industry median. What's more, Michael Binnion holds CA$1.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 45% of total compensation represents salary, while the remainder of 55% is other remuneration. It's interesting to note that Questerre Energy 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.
A Look at Questerre Energy Corporation's Growth Numbers
Questerre Energy Corporation has seen its earnings per share (EPS) increase by 11% a year over the past three years. The trailing twelve months of revenue was pretty much the same as the prior period.
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. 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 Questerre Energy Corporation Been A Good Investment?
Since shareholders would have lost about 88% over three years, some Questerre Energy Corporation 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, Questerre Energy Corporation is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, we must not forget that the EPS growth has been very strong, but shareholder returns — over the same period — have been disappointing. Although we'd stop short of calling it inappropriate, we think Michael is earning a very handsome sum.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Questerre Energy that you should be aware of before investing.
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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