This article will reflect on the compensation paid to P. MacFarlane who has served as CEO of Cathedral Energy Services Ltd. (TSE:CET) since 2013. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Cathedral Energy Services.

Check out our latest analysis for Cathedral Energy Services

Comparing Cathedral Energy Services Ltd.'s CEO Compensation With the industry

Our data indicates that Cathedral Energy Services Ltd. has a market capitalization of CA$5.9m, and total annual CEO compensation was reported as CA$381k for the year to December 2019. Notably, that's a decrease of 10% over the year before. Notably, the salary which is CA$340.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under CA$263m, the reported median total CEO compensation was CA$841k. Accordingly, Cathedral Energy Services pays its CEO under the industry median.

Speaking on an industry level, nearly 43% of total compensation represents salary, while the remainder of 57% is other remuneration. Cathedral Energy Services pays out 89% of remuneration in the form of a salary, significantly higher than the industry average. 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.

Cathedral Energy Services Ltd.'s Growth

Over the last three years, Cathedral Energy Services Ltd. has shrunk its earnings per share by 85% per year. It saw its revenue drop 49% over the last year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Cathedral Energy Services Ltd. Been A Good Investment?

Since shareholders would have lost about 88% over three years, some Cathedral Energy Services Ltd. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we noted earlier, Cathedral Energy Services pays its CEO lower than the norm for similar-sized companies belonging to the same industry. EPS growth has failed to impress us, and the same can be said about shareholder returns. It's tough to say that P. is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 3 which can't be ignored) in Cathedral Energy Services we think you should know about.

Switching gears from Cathedral 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.