Shareholders May Be Wary Of Increasing Journey Energy Inc.'s (TSE:JOY) CEO Compensation Package

Key Insights

• Journey Energy's Annual General Meeting to take place on 22nd of May
• Total pay for CEO Alex Verge includes CA$308.4k salary
• The overall pay is 107% above the industry average
• Journey Energy's EPS declined by 61% over the past three years while total shareholder loss over the past three years was 72%

We've discovered 2 warning signs about Journey Energy. View them for free.

The results at Journey Energy Inc. (TSE:JOY) have been quite disappointing recently and CEO Alex Verge bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 22nd of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Journey Energy

How Does Total Compensation For Alex Verge Compare With Other Companies In The Industry?

At the time of writing, our data shows that Journey Energy Inc. has a market capitalization of CA$113m, and reported total annual CEO compensation of CA$589k for the year to December 2024. That's a notable decrease of 24% on last year. We note that the salary of CA$308.4k makes up a sizeable portion of the total compensation received by the CEO.

In comparison with other companies in the Canadian Oil and Gas industry with market capitalizations under CA$280m, the reported median total CEO compensation was CA$285k. Hence, we can conclude that Alex Verge is remunerated higher than the industry median. Moreover, Alex Verge also holds CA$7.9m worth of Journey Energy stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	CA$308k	CA$285k	52%
Other	CA$281k	CA$493k	48%
Total Compensation	CA$589k	CA$778k	100%

Talking in terms of the industry, salary represented approximately 44% of total compensation out of all the companies we analyzed, while other remuneration made up 56% of the pie. It's interesting to note that Journey Energy pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Journey Energy Inc.'s Growth

Journey Energy Inc. has reduced its earnings per share by 61% a year over the last three years. In the last year, its revenue is down 9.4%.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Journey Energy Inc. Been A Good Investment?

The return of -72% over three years would not have pleased Journey Energy Inc. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Journey Energy that investors should think about before committing capital to this stock.

Important note: Journey 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.

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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.