Key Things To Understand About VAALCO Energy's (NYSE:EGY) CEO Pay Cheque
Cary Bounds has been the CEO of VAALCO Energy, Inc. (NYSE:EGY) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
See our latest analysis for VAALCO Energy
How Does Total Compensation For Cary Bounds Compare With Other Companies In The Industry?
Our data indicates that VAALCO Energy, Inc. has a market capitalization of US$59m, and total annual CEO compensation was reported as US$1.5m for the year to December 2019. Notably, that's an increase of 10% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$415k.
On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$677k. This suggests that Cary Bounds is paid more than the median for the industry. Furthermore, Cary Bounds directly owns US$762k worth of shares in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$415k | US$400k | 27% |
Other | US$1.1m | US$1.0m | 73% |
Total Compensation | US$1.5m | US$1.4m | 100% |
On an industry level, around 16% of total compensation represents salary and 84% is other remuneration. VAALCO Energy is paying a higher share of its remuneration through a 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 VAALCO Energy, Inc.'s Growth Numbers
VAALCO Energy, Inc. has reduced its earnings per share by 32% a year over the last three years. Its revenue is down 22% over the previous year.
Overall this is not a very positive result for shareholders. 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. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has VAALCO Energy, Inc. Been A Good Investment?
Most shareholders would probably be pleased with VAALCO Energy, Inc. for providing a total return of 37% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
As we noted earlier, VAALCO Energy pays its CEO higher than the norm for similar-sized companies belonging to the same industry. We feel that EPS have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. Considering positive investor returns, it would be bold of us to criticize CEO compensation, but shareholders might want to see healthier EPS growth before a raise is given out.
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 VAALCO Energy that investors should think about before committing capital to this 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.
This article by Simply Wall St is general in nature. 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.
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