We Think Shareholders May Want To Consider A Review Of U.S. Energy Corp.'s (NASDAQ:USEG) CEO Compensation Package
Key Insights
- U.S. Energy to hold its Annual General Meeting on 16th of May
- CEO Ryan Smith's total compensation includes salary of US$327.5k
- The overall pay is 61% above the industry average
- Over the past three years, U.S. Energy's EPS fell by 66% and over the past three years, the total loss to shareholders 70%
Shareholders will probably not be too impressed with the underwhelming results at U.S. Energy Corp. (NASDAQ:USEG) recently. At the upcoming AGM on 16th of May, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.
See our latest analysis for U.S. Energy
How Does Total Compensation For Ryan Smith Compare With Other Companies In The Industry?
Our data indicates that U.S. Energy Corp. has a market capitalization of US$37m, and total annual CEO compensation was reported as US$889k for the year to December 2024. That's a slight decrease of 8.0% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$327k.
On comparing similar-sized companies in the American Oil and Gas industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$551k. Hence, we can conclude that Ryan Smith is remunerated higher than the industry median. Moreover, Ryan Smith also holds US$1.3m worth of U.S. Energy stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | US$327k | US$320k | 37% |
| Other | US$562k | US$647k | 63% |
| Total Compensation | US$889k | US$966k | 100% |
On an industry level, roughly 14% of total compensation represents salary and 86% is other remuneration. According to our research, U.S. Energy has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at U.S. Energy Corp.'s Growth Numbers
U.S. Energy Corp. has reduced its earnings per share by 66% a year over the last three years. Its revenue is down 36% over the previous year.
The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 U.S. Energy Corp. Been A Good Investment?
With a total shareholder return of -70% over three years, U.S. Energy Corp. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 3 warning signs for U.S. Energy that investors should look into moving forward.
Important note: U.S. Energy is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.