Here's Why It's Unlikely That VAALCO Energy, Inc.'s (NYSE:EGY) CEO Will See A Pay Rise This Year

Key Insights

• VAALCO Energy will host its Annual General Meeting on 5th of June
• CEO George Maxwell's total compensation includes salary of US$591.3k
• Total compensation is similar to the industry average
• VAALCO Energy's three-year loss to shareholders was 54% while its EPS was down 27% over the past three years

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VAALCO Energy, Inc. (NYSE:EGY) has not performed well recently and CEO George Maxwell will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 5th of June. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for VAALCO Energy

Comparing VAALCO Energy, Inc.'s CEO Compensation With The Industry

According to our data, VAALCO Energy, Inc. has a market capitalization of US$341m, and paid its CEO total annual compensation worth US$3.0m over the year to December 2024. Notably, that's an increase of 53% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$591k.

On comparing similar companies from the American Oil and Gas industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$2.8m. This suggests that VAALCO Energy remunerates its CEO largely in line with the industry average. What's more, George Maxwell holds US$1.2m worth of shares in the company in their own name.

On an industry level, around 14% of total compensation represents salary and 86% is other remuneration. It's interesting to note that VAALCO Energy pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at VAALCO Energy, Inc.'s Growth Numbers

Over the last three years, VAALCO Energy, Inc. has shrunk its earnings per share by 27% per year. It achieved revenue growth of 3.0% over the last year.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has VAALCO Energy, Inc. Been A Good Investment?

With a total shareholder return of -54% over three years, VAALCO Energy, Inc. 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, the board will get the chance to explain the steps it plans to take to improve business performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for VAALCO Energy (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.