In the past three years, the share price of Block Energy Plc (LON:BLOE) has struggled to grow and now shareholders are sitting on a loss. 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 01 September 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.
Comparing Block Energy Plc's CEO Compensation With the industry
At the time of writing, our data shows that Block Energy Plc has a market capitalization of UK£15m, and reported total annual CEO compensation of US$442k for the year to December 2020. Notably, that's an increase of 29% over the year before. We note that the salary of US$224.6k makes up a sizeable portion of the total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under UK£146m, the reported median total CEO compensation was US$384k. From this we gather that Paul Haywood is paid around the median for CEOs in the industry. Moreover, Paul Haywood also holds UK£339k worth of Block Energy stock directly under their own name.
On an industry level, around 74% of total compensation represents salary and 26% is other remuneration. In Block Energy's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Block Energy Plc's Growth
Block Energy Plc has seen its earnings per share (EPS) increase by 13% a year over the past three years. It achieved revenue growth of 495% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Block Energy Plc Been A Good Investment?
With a three year total loss of 20% for the shareholders, Block Energy Plc would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. 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 pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 5 warning signs for Block Energy you should be aware of, and 3 of them are concerning.
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. 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.
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