We Discuss Why President Energy Plc's (LON:PPC) CEO Compensation May Be Closely Reviewed

The results at President Energy Plc (LON:PPC) have been quite disappointing recently and CEO Peter Levine bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 23 September 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for President Energy

How Does Total Compensation For Peter Levine Compare With Other Companies In The Industry?

At the time of writing, our data shows that President Energy Plc has a market capitalization of UK£36m, and reported total annual CEO compensation of US$591k for the year to December 2020. That's a notable decrease of 12% on last year. Notably, the salary of US$591k is the entirety of the CEO compensation.

In comparison with other companies in the industry with market capitalizations under UK£145m, the reported median total CEO compensation was US$398k. Hence, we can conclude that Peter Levine is remunerated higher than the industry median.

Component	2020	2019	Proportion (2020)
Salary	US$591k	US$670k	100%
Other	-	-	-
Total Compensation	US$591k	US$670k	100%

On an industry level, around 75% of total compensation represents salary and 25% is other remuneration. Speaking on a company level, President Energy prefers to tread along a traditional path, disbursing all compensation through a salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

President Energy Plc's Growth

Over the last three years, President Energy Plc has shrunk its earnings per share by 68% per year. In the last year, its revenue is down 32%.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has President Energy Plc Been A Good Investment?

With a total shareholder return of -79% over three years, President Energy Plc shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

President Energy pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. 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.

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 did our research and spotted 4 warning signs for President Energy that investors should look into moving forward.

Switching gears from President Energy, 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.
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