David Messina became the CEO of Whitebark Energy Limited (ASX:WBE) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does David Messina's Compensation Compare With Similar Sized Companies?
Our data indicates that Whitebark Energy Limited is worth AU$24m, and total annual CEO compensation was reported as AU$529k for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$442k. We examined a group of similar sized companies, with market capitalizations of below AU$302m. The median CEO total compensation in that group is AU$379k.
It would therefore appear that Whitebark Energy Limited pays David Messina more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Whitebark Energy has changed over time.
Is Whitebark Energy Limited Growing?
On average over the last three years, Whitebark Energy Limited has grown earnings per share (EPS) by 64% each year (using a line of best fit). It achieved revenue growth of 15% over the last year.
This demonstrates that the company has been improving recently. A good result. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Whitebark Energy Limited Been A Good Investment?
With a three year total loss of 22%, Whitebark Energy Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared total CEO remuneration at Whitebark Energy Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling Whitebark Energy shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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