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Is Cabot Oil & Gas Corporation (NYSE:COG) Overpaying Its CEO?

Simply Wall St

Dan Dinges became the CEO of Cabot Oil & Gas Corporation (NYSE:COG) in 2002. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Cabot Oil & Gas

How Does Dan Dinges's Compensation Compare With Similar Sized Companies?

According to our data, Cabot Oil & Gas Corporation has a market capitalization of US$6.4b, and paid its CEO total annual compensation worth US$13m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$1.0m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.8m.

It would therefore appear that Cabot Oil & Gas Corporation pays Dan Dinges more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see a visual representation of the CEO compensation at Cabot Oil & Gas, below.

NYSE:COG CEO Compensation, December 7th 2019

Is Cabot Oil & Gas Corporation Growing?

Over the last three years Cabot Oil & Gas Corporation has grown its earnings per share (EPS) by an average of 118% per year (using a line of best fit). It achieved revenue growth of 15% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. It could be important to check this free visual depiction of what analysts expect for the future.

Has Cabot Oil & Gas Corporation Been A Good Investment?

With a three year total loss of 30%, Cabot Oil & Gas Corporation would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We examined the amount Cabot Oil & Gas Corporation pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

However we must not forget that the EPS growth has been very strong over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Cabot Oil & Gas (free visualization of insider trades).

If you want to buy a stock that is better than Cabot Oil & Gas, this free list of high return, low debt companies is a great place to look.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.