It would be hard to discount the role that CEO Philip Kelso has played in delivering the impressive results at Bounty Oil & Gas NL (ASX:BUY) recently. Shareholders will have this at the front of their minds in the upcoming AGM on 30 November 2022. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

View our latest analysis for Bounty Oil & Gas

How Does Total Compensation For Philip Kelso Compare With Other Companies In The Industry?

According to our data, Bounty Oil & Gas NL has a market capitalization of AU$11m, and paid its CEO total annual compensation worth AU$330k over the year to June 2022. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at AU$320.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below AU$302m, we found that the median total CEO compensation was AU$373k. So it looks like Bounty Oil & Gas compensates Philip Kelso in line with the median for the industry. Furthermore, Philip Kelso directly owns AU$290k worth of shares in the company.

On an industry level, roughly 54% of total compensation represents salary and 46% is other remuneration. Bounty Oil & Gas is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Bounty Oil & Gas NL's Growth

Bounty Oil & Gas NL has seen its earnings per share (EPS) increase by 12% a year over the past three years. It achieved revenue growth of 28% 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. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Bounty Oil & Gas NL Been A Good Investment?

Boasting a total shareholder return of 100% over three years, Bounty Oil & Gas NL has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Bounty Oil & Gas pays its CEO a majority of compensation through a salary. Seeing that company performance has been quite good recently, some shareholders may feel that CEO compensation may not be the biggest focus in the upcoming AGM. However, despite the strong growth in earnings and share price growth, the focus for shareholders would be how the company plans to steer the company towards sustainable profitability in the near future.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for Bounty Oil & Gas (3 make us uncomfortable!) that you should be aware of before investing here.

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.

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

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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