Here's Why Shareholders Should Examine Pine Cliff Energy Ltd.'s (TSE:PNE) CEO Compensation Package More Closely

Key Insights

• Pine Cliff Energy's Annual General Meeting to take place on 20th of May
• Salary of CA$367.0k is part of CEO Phil Hodge's total remuneration
• The total compensation is 264% higher than the average for the industry
• Pine Cliff Energy's three-year loss to shareholders was 61% while its EPS was down 106% over the past three years

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Shareholders will probably not be too impressed with the underwhelming results at Pine Cliff Energy Ltd. (TSE:PNE) recently. At the upcoming AGM on 20th of May, shareholders can hear from the board including their plans for turning around performance. 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 Pine Cliff Energy

Comparing Pine Cliff Energy Ltd.'s CEO Compensation With The Industry

Our data indicates that Pine Cliff Energy Ltd. has a market capitalization of CA$208m, and total annual CEO compensation was reported as CA$1.0m for the year to December 2024. That's a notable decrease of 20% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$367k.

In comparison with other companies in the Canadian Oil and Gas industry with market capitalizations under CA$279m, the reported median total CEO compensation was CA$285k. Hence, we can conclude that Phil Hodge is remunerated higher than the industry median. What's more, Phil Hodge holds CA$6.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 44% of total compensation represents salary and 56% is other remuneration. Pine Cliff Energy pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Pine Cliff Energy Ltd.'s Growth

Over the last three years, Pine Cliff Energy Ltd. has shrunk its earnings per share by 106% per year. Its revenue is up 2.8% over the last year.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Pine Cliff Energy Ltd. Been A Good Investment?

Few Pine Cliff Energy Ltd. shareholders would feel satisfied with the return of -61% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid 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.

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.

Switching gears from Pine Cliff Energy, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.