We Think Shareholders May Want To Consider A Review Of Questerre Energy Corporation's (TSE:QEC) CEO Compensation Package

Shareholders will probably not be too impressed with the underwhelming results at Questerre Energy Corporation (TSE:QEC) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 02 June 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for Questerre Energy

How Does Total Compensation For Michael Binnion Compare With Other Companies In The Industry?

At the time of writing, our data shows that Questerre Energy Corporation has a market capitalization of CA$73m, and reported total annual CEO compensation of CA$483k for the year to December 2020. We note that's a decrease of 25% compared to last year. Notably, the salary which is CA$273.7k, represents a considerable chunk of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under CA$242m, the reported median total CEO compensation was CA$257k. Accordingly, our analysis reveals that Questerre Energy Corporation pays Michael Binnion north of the industry median. Moreover, Michael Binnion also holds CA$2.0m worth of Questerre Energy stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	CA$274k	CA$325k	57%
Other	CA$209k	CA$322k	43%
Total Compensation	CA$483k	CA$647k	100%

Talking in terms of the industry, salary represented approximately 57% of total compensation out of all the companies we analyzed, while other remuneration made up 43% of the pie. There isn't a significant difference between Questerre Energy and the broader market, in terms of salary allocation in the overall compensation package. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Questerre Energy Corporation's Growth Numbers

Over the last three years, Questerre Energy Corporation has shrunk its earnings per share by 43% per year. In the last year, its revenue is down 33%.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Questerre Energy Corporation Been A Good Investment?

With a total shareholder return of -81% over three years, Questerre Energy Corporation shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

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 2 warning signs for Questerre Energy that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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This article by Simply Wall St is general in nature. 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.
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