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Is Carrizo Oil & Gas, Inc.'s (NASDAQ:CRZO) CEO Paid Enough Relative To Peers?

Simply Wall St

Chip Johnson has been the CEO of Carrizo Oil & Gas, Inc. (NASDAQ:CRZO) since 1993. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

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View our latest analysis for Carrizo Oil & Gas

How Does Chip Johnson's Compensation Compare With Similar Sized Companies?

Our data indicates that Carrizo Oil & Gas, Inc. is worth US$1.2b, and total annual CEO compensation is US$5.7m. (This figure is for the year to December 2018). That's actually a decrease on the year before. While we always look at total compensation first, we note that the salary component is less, at US$670k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$4.0m.

As you can see, Chip Johnson is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Carrizo Oil & Gas, Inc. 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, below, how CEO compensation at Carrizo Oil & Gas has changed over time.

NasdaqGS:CRZO CEO Compensation, May 22nd 2019

Is Carrizo Oil & Gas, Inc. Growing?

Carrizo Oil & Gas, Inc. has increased its earnings per share (EPS) by an average of 132% a year, over the last three years (using a line of best fit). Its revenue is up 29% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. It could be important to check this free visual depiction of what analysts expect for the future.

Has Carrizo Oil & Gas, Inc. Been A Good Investment?

Given the total loss of 66% over three years, many shareholders in Carrizo Oil & Gas, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared the total CEO remuneration paid by Carrizo Oil & Gas, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. On the other hand returns to investors over the same period have probably disappointed many. 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 Carrizo Oil & Gas insiders are buying or selling shares.

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.

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.

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. Thank you for reading.