Regan Davis became the CEO of STEP Energy Services Ltd. (TSE:STEP) in 2011, 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.
How Does Total Compensation For Regan Davis Compare With Other Companies In The Industry?
According to our data, STEP Energy Services Ltd. has a market capitalization of CA$33m, and paid its CEO total annual compensation worth CA$1.2m over the year to December 2019. That's a notable decrease of 11% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$394k.
In comparison with other companies in the industry with market capitalizations under CA$265m, the reported median total CEO compensation was CA$1.1m. From this we gather that Regan Davis is paid around the median for CEOs in the industry. Moreover, Regan Davis also holds CA$73k worth of STEP Energy Services stock directly under their own name.
On an industry level, roughly 37% of total compensation represents salary and 63% is other remuneration. STEP Energy Services sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
STEP Energy Services Ltd.'s Growth
Over the last three years, STEP Energy Services Ltd. has shrunk its earnings per share by 109% per year. It saw its revenue drop 30% over the last year.
Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has STEP Energy Services Ltd. Been A Good Investment?
Given the total shareholder loss of 96% over three years, many shareholders in STEP Energy Services Ltd. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we noted earlier, STEP Energy Services pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for STEP Energy Services that investors should look into moving forward.
Switching gears from STEP Energy Services, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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