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Valeura Energy Inc. (TSE:VLE) has not performed well recently and CEO W. Guest will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 13 May 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. From our analysis, we think CEO compensation may need a review in light of the recent performance.
How Does Total Compensation For W. Guest Compare With Other Companies In The Industry?
Our data indicates that Valeura Energy Inc. has a market capitalization of CA$42m, and total annual CEO compensation was reported as US$573k for the year to December 2020. We note that's a decrease of 37% compared to last year. In particular, the salary of US$290.4k, makes up a fairly large portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under CA$244m, the reported median total CEO compensation was US$205k. This suggests that W. Guest is paid more than the median for the industry. What's more, W. Guest holds CA$192k worth of shares in the company in their own name.
On an industry level, roughly 51% of total compensation represents salary and 49% is other remuneration. Valeura Energy is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Valeura Energy Inc.'s Growth
Over the last three years, Valeura Energy Inc. has shrunk its earnings per share by 6.1% per year. Its revenue is down 19% over the previous 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 Valeura Energy Inc. Been A Good Investment?
Few Valeura Energy Inc. shareholders would feel satisfied with the return of -91% over three years. So shareholders would probably want the company to be less generous with CEO compensation.
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. 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 compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 3 warning signs for Valeura Energy that investors should be aware of in a dynamic business environment.
Important note: Valeura 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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