Shareholders May Find It Hard To Justify Increasing Block Energy Plc's (LON:BLOE) CEO Compensation For Now

Key Insights

• Block Energy to hold its Annual General Meeting on 20th of June
• CEO Paul Haywood's total compensation includes salary of US$270.5k
• The total compensation is similar to the average for the industry
• Block Energy's EPS grew by 55% over the past three years while total shareholder loss over the past three years was 55%

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. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 20th of June. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Block Energy

Comparing Block Energy Plc's CEO Compensation With The Industry

According to our data, Block Energy Plc has a market capitalization of UK£8.0m, and paid its CEO total annual compensation worth US$548k over the year to December 2023. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$270k.

On comparing similar-sized companies in the British Oil and Gas industry with market capitalizations below UK£156m, we found that the median total CEO compensation was US$438k. This suggests that Block Energy remunerates its CEO largely in line with the industry average. Moreover, Paul Haywood also holds UK£160k worth of Block Energy stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	US$270k	US$250k	49%
Other	US$278k	US$309k	51%
Total Compensation	US$548k	US$559k	100%

Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. Block Energy sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Block Energy Plc's Growth Numbers

Over the past three years, Block Energy Plc has seen its earnings per share (EPS) grow by 55% per year. It achieved revenue growth of 1.3% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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?

The return of -55% over three years would not have pleased Block Energy Plc shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 3 warning signs for Block Energy you should be aware of, and 2 of them make us uncomfortable.

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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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.