Here's Why Shareholders May Want To Be Cautious With Increasing Clean Energy Transition Inc.'s (CVE:TRAN) CEO Pay Packet

Key Insights

• Clean Energy Transition to hold its Annual General Meeting on 19th of December
• Total pay for CEO Sean Joseph Samson includes CA$185.0k salary
• The total compensation is similar to the average for the industry
• Clean Energy Transition's EPS grew by 22% over the past three years while total shareholder loss over the past three years was 40%

The underwhelming share price performance of Clean Energy Transition Inc. (CVE:TRAN) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 19th of December could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for Clean Energy Transition

Comparing Clean Energy Transition Inc.'s CEO Compensation With The Industry

According to our data, Clean Energy Transition Inc. has a market capitalization of CA$2.2m, and paid its CEO total annual compensation worth CA$185k over the year to April 2024. That's a slight decrease of 6.0% on the prior year. It is worth noting that the CEO compensation consists entirely of the salary, worth CA$185k.

On comparing similar-sized companies in the Canadian Metals and Mining industry with market capitalizations below CA$283m, we found that the median total CEO compensation was CA$189k. This suggests that Clean Energy Transition remunerates its CEO largely in line with the industry average. What's more, Sean Joseph Samson holds CA$72k worth of shares in the company in their own name.

Component	2024	2023	Proportion (2024)
Salary	CA$185k	CA$197k	100%
Other	-	-	-
Total Compensation	CA$185k	CA$197k	100%

Speaking on an industry level, nearly 95% of total compensation represents salary, while the remainder of 5% is other remuneration. At the company level, Clean Energy Transition pays Sean Joseph Samson solely through a salary, preferring to go down a conventional route. 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 Clean Energy Transition Inc.'s Growth Numbers

Clean Energy Transition Inc.'s earnings per share (EPS) grew 22% per year over the last three years. It saw its revenue drop 81% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Clean Energy Transition Inc. Been A Good Investment?

With a total shareholder return of -40% over three years, Clean Energy Transition Inc. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Clean Energy Transition rewards its CEO solely through a salary, ignoring non-salary benefits completely. The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 5 warning signs for Clean Energy Transition that investors should be aware of in a dynamic business environment.

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.

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.