Yahoo Finance We Take A Look At Why VAALCO Energy, Inc.'s (NYSE:EGY) CEO Compensation Is Well Earned
Key Insights
VAALCO Energy's Annual General Meeting to take place on 6th of June
CEO George Maxwell's total compensation includes salary of US$550.0k
The total compensation is similar to the average for the industry
VAALCO Energy's total shareholder return over the past three years was 126% while its EPS grew by 35% over the past three years
The performance at VAALCO Energy, Inc. (NYSE:EGY) has been quite strong recently and CEO George Maxwell has played a role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 6th of June. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is not extravagant.
See our latest analysis for VAALCO Energy
Comparing VAALCO Energy, Inc.'s CEO Compensation With The Industry
Our data indicates that VAALCO Energy, Inc. has a market capitalization of US$651m, and total annual CEO compensation was reported as US$2.0m for the year to December 2023. That's a notable increase of 15% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$550k.
For comparison, other companies in the American Oil and Gas industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$2.8m. This suggests that VAALCO Energy remunerates its CEO largely in line with the industry average. Furthermore, George Maxwell directly owns US$1.5m worth of shares in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$550k | US$550k | 28% |
Other | US$1.4m | US$1.2m | 72% |
Total Compensation | US$2.0m | US$1.7m | 100% |
On an industry level, roughly 14% of total compensation represents salary and 86% is other remuneration. According to our research, VAALCO Energy has allocated a higher percentage of pay to salary in comparison to the wider 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 past three years, VAALCO Energy, Inc. has seen its earnings per share (EPS) grow by 35% per year. Its revenue is up 30% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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?
Boasting a total shareholder return of 126% over three years, VAALCO Energy, Inc. 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.
To Conclude...
Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for VAALCO Energy that investors should think about before committing capital to this stock.
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.
