This Is The Reason Why We Think Stonehorse Energy Limited's (ASX:SHE) CEO Deserves A Bump Up To Their Compensation
Key Insights
Stonehorse Energy's Annual General Meeting to take place on 28th of November
CEO David DeLoub's total compensation includes salary of AU$136.4k
The overall pay is 63% below the industry average
Over the past three years, Stonehorse Energy's EPS grew by 100% and over the past three years, the total shareholder return was 60%
The impressive results at Stonehorse Energy Limited (ASX:SHE) recently will be great news for shareholders. At the upcoming AGM on 28th of November, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.
See our latest analysis for Stonehorse Energy
Comparing Stonehorse Energy Limited's CEO Compensation With The Industry
Our data indicates that Stonehorse Energy Limited has a market capitalization of AU$12m, and total annual CEO compensation was reported as AU$211k for the year to June 2023. Notably, that's an increase of 25% over the year before. In particular, the salary of AU$136.4k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the Australia Energy Services industry with market capitalizations below AU$305m, reported a median total CEO compensation of AU$564k. Accordingly, Stonehorse Energy pays its CEO under the industry median.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$136k | AU$121k | 65% |
Other | AU$75k | AU$47k | 35% |
Total Compensation | AU$211k | AU$168k | 100% |
On an industry level, roughly 39% of total compensation represents salary and 61% is other remuneration. Stonehorse Energy is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Stonehorse Energy Limited's Growth
Stonehorse Energy Limited's earnings per share (EPS) grew 100% per year over the last three years. Its revenue is down 46% over the previous year.
Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Stonehorse Energy Limited Been A Good Investment?
Most shareholders would probably be pleased with Stonehorse Energy Limited for providing a total return of 60% over three years. 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...
The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 3 warning signs for Stonehorse Energy you should be aware of, and 1 of them is a bit unpleasant.
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.
