We Think Some Shareholders May Hesitate To Increase Ensign Energy Services Inc.'s (TSE:ESI) CEO Compensation

Key Insights

• Ensign Energy Services to hold its Annual General Meeting on 9th of May
• Salary of CA$850.0k is part of CEO Bob Geddes's total remuneration
• The overall pay is 47% above the industry average
• Over the past three years, Ensign Energy Services' EPS grew by 106% and over the past three years, the total loss to shareholders 55%

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Shareholders of Ensign Energy Services Inc. (TSE:ESI) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 9th of May. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for Ensign Energy Services

How Does Total Compensation For Bob Geddes Compare With Other Companies In The Industry?

At the time of writing, our data shows that Ensign Energy Services Inc. has a market capitalization of CA$339m, and reported total annual CEO compensation of CA$3.0m for the year to December 2024. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$850k.

On comparing similar companies from the Canadian Energy Services industry with market caps ranging from CA$138m to CA$552m, we found that the median CEO total compensation was CA$2.0m. Accordingly, our analysis reveals that Ensign Energy Services Inc. pays Bob Geddes north of the industry median. What's more, Bob Geddes holds CA$3.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	CA$850k	CA$795k	28%
Other	CA$2.1m	CA$2.2m	72%
Total Compensation	CA$3.0m	CA$3.0m	100%

Speaking on an industry level, nearly 26% of total compensation represents salary, while the remainder of 74% is other remuneration. It's interesting to note that Ensign Energy Services pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Ensign Energy Services Inc.'s Growth

Ensign Energy Services Inc.'s earnings per share (EPS) grew 106% per year over the last three years. Its revenue is down 6.0% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. 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 Ensign Energy Services Inc. Been A Good Investment?

Few Ensign Energy Services Inc. shareholders would feel satisfied with the return of -55% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Ensign Energy Services.

Important note: Ensign Energy Services 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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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.