Yahoo Finance Should Shareholders Reconsider WesCan Energy Corp.'s (CVE:WCE) CEO Compensation Package?
WesCan Energy Corp. (CVE:WCE) has not performed well recently and CEO Greg Busby will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 17 June 2021. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.
View our latest analysis for WesCan Energy
Comparing WesCan Energy Corp.'s CEO Compensation With the industry
According to our data, WesCan Energy Corp. has a market capitalization of CA$1.9m, and paid its CEO total annual compensation worth CA$185k over the year to March 2021. There was no change in the compensation compared to last year. It is worth noting that the CEO compensation consists entirely of the salary, worth CA$185k.
For comparison, other companies in the industry with market capitalizations below CA$243m, reported a median total CEO compensation of CA$247k. So it looks like WesCan Energy compensates Greg Busby in line with the median for the industry. What's more, Greg Busby holds CA$98k worth of shares in the company in their own name.
Component | 2021 | 2020 | Proportion (2021) |
Salary | CA$185k | CA$185k | 100% |
Other | - | - | - |
Total Compensation | CA$185k | CA$185k | 100% |
On an industry level, around 53% of total compensation represents salary and 47% is other remuneration. Speaking on a company level, WesCan Energy prefers to tread along a traditional path, disbursing all compensation through a salary. 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.
WesCan Energy Corp.'s Growth
Over the last three years, WesCan Energy Corp. has shrunk its earnings per share by 86% per year. Its revenue is down 49% over the previous year.
The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 WesCan Energy Corp. Been A Good Investment?
Few WesCan Energy Corp. shareholders would feel satisfied with the return of -42% over three years. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
WesCan Energy rewards its CEO solely through a salary, ignoring non-salary benefits completely. Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 6 warning signs for WesCan Energy (4 shouldn't be ignored!) that you should be aware of before investing here.
Important note: WesCan Energy 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.
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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