It's Unlikely That The CEO Of Ascent Resources Plc (LON:AST) Will See A Huge Pay Rise This Year

Key Insights

• Ascent Resources to hold its Annual General Meeting on 26th of June
• CEO Andy Dennan's total compensation includes salary of UK£250.0k
• The total compensation is similar to the average for the industry
• Ascent Resources' EPS declined by 58% over the past three years while total shareholder loss over the past three years was 58%

In the past three years, the share price of Ascent Resources Plc (LON:AST) has struggled to grow and now shareholders are sitting on a loss. Per share earnings growth is also lacking, despite revenue growth. Shareholders will have a chance to take their concerns to the board at the next AGM on 26th of June and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

View our latest analysis for Ascent Resources

How Does Total Compensation For Andy Dennan Compare With Other Companies In The Industry?

At the time of writing, our data shows that Ascent Resources Plc has a market capitalization of UK£4.2m, and reported total annual CEO compensation of UK£275k for the year to December 2023. We note that's a decrease of 12% compared to last year. In particular, the salary of UK£250.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the British Oil and Gas industry with market capitalizations below UK£157m, we found that the median total CEO compensation was UK£342k. This suggests that Ascent Resources remunerates its CEO largely in line with the industry average. Moreover, Andy Dennan also holds UK£43k worth of Ascent Resources stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	UK£250k	UK£250k	91%
Other	UK£25k	UK£63k	9%
Total Compensation	UK£275k	UK£313k	100%

On an industry level, roughly 70% of total compensation represents salary and 30% is other remuneration. Ascent Resources is paying a higher share of its remuneration through a salary in comparison to the overall industry. 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.

Ascent Resources Plc's Growth

Ascent Resources Plc has reduced its earnings per share by 58% a year over the last three years. Its revenue is up 143% over the last year.

The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Ascent Resources Plc Been A Good Investment?

The return of -58% over three years would not have pleased Ascent Resources Plc shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 5 warning signs (and 3 which are significant) in Ascent Resources we think you should know about.

Switching gears from Ascent 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.

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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.

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