Parex Resources Inc.'s (TSE:PXT) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• Parex Resources' Annual General Meeting to take place on 8th of May
• CEO Imad Mohsen's total compensation includes salary of US$469.5k
• Total compensation is 45% above industry average
• Parex Resources' three-year loss to shareholders was 47% while its EPS was down 36% over the past three years

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

Shareholders will probably not be too impressed with the underwhelming results at Parex Resources Inc. (TSE:PXT) recently. At the upcoming AGM on 8th 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 Parex Resources

How Does Total Compensation For Imad Mohsen Compare With Other Companies In The Industry?

At the time of writing, our data shows that Parex Resources Inc. has a market capitalization of CA$1.1b, and reported total annual CEO compensation of US$2.8m for the year to December 2024. We note that's a decrease of 8.2% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$470k.

On comparing similar companies from the Canadian Oil and Gas industry with market caps ranging from CA$551m to CA$2.2b, we found that the median CEO total compensation was US$1.9m. Accordingly, our analysis reveals that Parex Resources Inc. pays Imad Mohsen north of the industry median. Moreover, Imad Mohsen also holds CA$1.3m worth of Parex Resources stock directly under their own name.

Component	2024	2023	Proportion (2024)
Salary	US$470k	US$509k	17%
Other	US$2.3m	US$2.5m	83%
Total Compensation	US$2.8m	US$3.0m	100%

On an industry level, around 47% of total compensation represents salary and 53% is other remuneration. Parex Resources sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Parex Resources Inc.'s Growth

Over the last three years, Parex Resources Inc. has shrunk its earnings per share by 36% per year. It saw its revenue drop 7.2% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Parex Resources Inc. Been A Good Investment?

The return of -47% over three years would not have pleased Parex Resources Inc. shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 1 which is potentially serious) in Parex Resources we think you should know about.

Switching gears from Parex Resources, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.