Shareholders May Find It Hard To Justify Increasing Harbour Energy plc's (LON:HBR) CEO Compensation For Now

Key Insights

• Harbour Energy's Annual General Meeting to take place on 8th of May
• Salary of US$1.13m is part of CEO Linda Cook's total remuneration
• The total compensation is similar to the average for the industry
• Harbour Energy's three-year loss to shareholders was 61% while its EPS was down 54% over the past three years

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Shareholders of Harbour Energy plc (LON:HBR) will have been dismayed by the negative share price return over the last three years. 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 8th of May 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.

See our latest analysis for Harbour Energy

How Does Total Compensation For Linda Cook Compare With Other Companies In The Industry?

At the time of writing, our data shows that Harbour Energy plc has a market capitalization of UK£2.6b, and reported total annual CEO compensation of US$3.8m for the year to December 2024. We note that's an increase of 24% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.1m.

For comparison, other companies in the British Oil and Gas industry with market capitalizations ranging between UK£1.5b and UK£4.8b had a median total CEO compensation of US$3.0m. This suggests that Harbour Energy remunerates its CEO largely in line with the industry average. What's more, Linda Cook holds UK£14m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	US$1.1m	US$1.1m	30%
Other	US$2.7m	US$2.0m	70%
Total Compensation	US$3.8m	US$3.1m	100%

Speaking on an industry level, nearly 69% of total compensation represents salary, while the remainder of 31% is other remuneration. Harbour 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 Harbour Energy plc's Growth Numbers

Harbour Energy plc has reduced its earnings per share by 54% a year over the last three years. Its revenue is up 66% over the last year.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Harbour Energy plc Been A Good Investment?

Few Harbour Energy plc shareholders would feel satisfied with the return of -61% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. In the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan is 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. That's why we did some digging and identified 2 warning signs for Harbour Energy that you should be aware of before investing.

Switching gears from Harbour 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.