Oil Stocks- Tourmaline Oil Corp.’s (TSE:TOU) CEO Compensation Looks Acceptable To Us And Here’s Why
Performance at Tourmaline Oil Corp. (TSE:TOU) has been reasonably good and CEO Mike Rose has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 02 June 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.
See our latest analysis for Tourmaline Oil
Comparing Tourmaline Oil Corp.’s CEO Compensation With the industry
Our data indicates that Tourmaline Oil Corp. has a market capitalization of CA$8.6b, and total annual CEO compensation was reported as CA$4.6m for the year to December 2020. We note that’s an increase of 36% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$600k.
In comparison with other companies in the industry with market capitalizations ranging from CA$4.8b to CA$14b, the reported median CEO total compensation was CA$4.6m. This suggests that Tourmaline Oil remunerates its CEO largely in line with the industry average. Moreover, Mike Rose also holds CA$469m worth of Tourmaline Oil stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 56% of total compensation out of all the companies we analyzed, while other remuneration made up 44% of the pie. It’s interesting to note that Tourmaline Oil allocates a smaller portion of compensation to salary in comparison to the broader industry. It’s important to note that a slant towards non-salary compensation suggests that total pay is tied to the company’s performance.
A Look at Tourmaline Oil Corp.’s Growth Numbers
Tourmaline Oil Corp. has seen its earnings per share (EPS) increase by 32% a year over the past three years. It achieved revenue growth of 46% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Tourmaline Oil Corp. Been A Good Investment?
Tourmaline Oil Corp. has generated a total shareholder return of 30% over three years, so most shareholders would be reasonably content. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
Given that the company’s overall performance has been reasonable, the CEO remuneration policy might not be shareholders’ central point of focus in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.
CEO compensation is an important area to keep your eyes on, but we’ve also need to pay attention to other attributes of the company. That’s why we did our research, and identified 4 warning signs for Tourmaline Oil (of which 1 makes us a bit uncomfortable!) that you should know about in order to have a holistic understanding of the stock.
Important note: Tourmaline Oil 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.
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