It Looks Like Shareholders Would Probably Approve PetroNeft Resources plc's (ISE:P8ET) CEO Compensation Package

We have been pretty impressed with the performance at PetroNeft Resources plc (ISE:P8ET) recently and CEO David Sturt deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 17 December 2021. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

View our latest analysis for PetroNeft Resources

How Does Total Compensation For David Sturt Compare With Other Companies In The Industry?

According to our data, PetroNeft Resources plc has a market capitalization of €37m, and paid its CEO total annual compensation worth US$459k over the year to December 2020. That's just a smallish increase of 7.7% on last year. In particular, the salary of US$428.8k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under €177m, the reported median total CEO compensation was US$364k. So it looks like PetroNeft Resources compensates David Sturt in line with the median for the industry. Furthermore, David Sturt directly owns €913k worth of shares in the company.

Component	2020	2019	Proportion (2020)
Salary	US$429k	US$307k	93%
Other	US$30k	US$119k	7%
Total Compensation	US$459k	US$426k	100%

Speaking on an industry level, nearly 76% of total compensation represents salary, while the remainder of 24% is other remuneration. According to our research, PetroNeft Resources has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at PetroNeft Resources plc's Growth Numbers

PetroNeft Resources plc's earnings per share (EPS) grew 14% per year over the last three years. Its revenue is up 94% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has PetroNeft Resources plc Been A Good Investment?

Boasting a total shareholder return of 169% over three years, PetroNeft Resources plc has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Given the improved performance, shareholders may be more forgiving of CEO compensation in the upcoming AGM. Seeing that earnings growth and share price performance seems to be on the right path, the more pressing focus for shareholders at the AGM may be how the board and management plans to turn the company into a sustainably profitable one.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 5 warning signs for PetroNeft Resources that investors should look into moving forward.

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.