In 2014 Todd Stevens was appointed CEO of California Resources Corporation (NYSE:CRC). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Todd Stevens's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that California Resources Corporation has a market cap of US$485m, and reported total annual CEO compensation of US$7.7m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$867k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$1.8m.
As you can see, Todd Stevens is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean California Resources Corporation is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at California Resources, below.
Is California Resources Corporation Growing?
On average over the last three years, California Resources Corporation has grown earnings per share (EPS) by 108% each year (using a line of best fit). It achieved revenue growth of 26% 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 earnings per share improvement certainly points to the kind of growth I like to see. Shareholders might be interested in this free visualization of analyst forecasts.
Has California Resources Corporation Been A Good Investment?
Given the total loss of 6.6% over three years, many shareholders in California Resources Corporation are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at California Resources Corporation with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that 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. Shareholders may want to check for free if California Resources insiders are buying or selling shares.
Important note: California Resources may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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