Here's Why Shareholders May Want To Be Cautious With Increasing Pine Cliff Energy Ltd.'s (TSE:PNE) CEO Pay Packet

Key Insights

• Pine Cliff Energy's Annual General Meeting to take place on 16th of May
• Total pay for CEO Phil Hodge includes CA$355.0k salary
• The total compensation is 86% higher than the average for the industry
• Over the past three years, Pine Cliff Energy's EPS grew by 10% and over the past three years, the total shareholder return was 303%

Under the guidance of CEO Phil Hodge, Pine Cliff Energy Ltd. (TSE:PNE) has performed reasonably well recently. As shareholders go into the upcoming AGM on 16th of May, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Pine Cliff Energy

How Does Total Compensation For Phil Hodge Compare With Other Companies In The Industry?

According to our data, Pine Cliff Energy Ltd. has a market capitalization of CA$350m, and paid its CEO total annual compensation worth CA$1.3m over the year to December 2023. We note that's a decrease of 20% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$355k.

On examining similar-sized companies in the Canadian Oil and Gas industry with market capitalizations between CA$137m and CA$547m, we discovered that the median CEO total compensation of that group was CA$696k. Hence, we can conclude that Phil Hodge is remunerated higher than the industry median. Furthermore, Phil Hodge directly owns CA$10m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CA$355k	CA$350k	27%
Other	CA$939k	CA$1.3m	73%
Total Compensation	CA$1.3m	CA$1.6m	100%

Speaking on an industry level, nearly 37% of total compensation represents salary, while the remainder of 63% is other remuneration. It's interesting to note that Pine Cliff Energy allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Pine Cliff Energy Ltd.'s Growth Numbers

Pine Cliff Energy Ltd.'s earnings per share (EPS) grew 10% per year over the last three years. In the last year, its revenue is down 34%.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 Pine Cliff Energy Ltd. Been A Good Investment?

We think that the total shareholder return of 303%, over three years, would leave most Pine Cliff Energy Ltd. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Pine Cliff Energy that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.