It Looks Like Valeura Energy Inc.'s (TSE:VLE) CEO May Expect Their Salary To Be Put Under The Microscope

The results at Valeura Energy Inc. (TSE:VLE) have been quite disappointing recently and CEO W. Guest bears some responsibility for this. At the upcoming AGM on 13 May 2021, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Valeura Energy

How Does Total Compensation For W. Guest Compare With Other Companies In The Industry?

At the time of writing, our data shows that Valeura Energy Inc. has a market capitalization of CA$42m, and reported total annual CEO compensation of US$573k for the year to December 2020. We note that's a decrease of 37% compared to last year. Notably, the salary which is US$290.4k, represents a considerable chunk of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below CA$244m, reported a median total CEO compensation of US$205k. This suggests that W. Guest is paid more than the median for the industry. Furthermore, W. Guest directly owns CA$192k worth of shares in the company.

Component	2020	2019	Proportion (2020)
Salary	US$290k	US$274k	51%
Other	US$282k	US$629k	49%
Total Compensation	US$573k	US$903k	100%

On an industry level, around 51% of total compensation represents salary and 49% is other remuneration. There isn't a significant difference between Valeura Energy and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Valeura Energy Inc.'s Growth Numbers

Valeura Energy Inc. has reduced its earnings per share by 6.1% a year over the last three years. Its revenue is down 19% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Valeura Energy Inc. Been A Good Investment?

The return of -91% over three years would not have pleased Valeura Energy Inc. shareholders. 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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 3 warning signs for Valeura Energy that investors should be aware of in a dynamic business environment.

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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