Jack Fusco became the CEO of Cheniere Energy, Inc. (NYSEMKT:LNG) in 2016. First, this article will compare CEO compensation with compensation at other large companies. Next, we'll consider growth that the business demonstrates. 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.
How Does Jack Fusco's Compensation Compare With Similar Sized Companies?
Our data indicates that Cheniere Energy, Inc. is worth US$15b, and total annual CEO compensation was reported as US$21m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$1.3m. 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 looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
It would therefore appear that Cheniere Energy, Inc. pays Jack Fusco more than the median CEO remuneration at large companies, 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, below, how CEO compensation at Cheniere Energy has changed over time.
Is Cheniere Energy, Inc. Growing?
Over the last three years Cheniere Energy, Inc. has grown its earnings per share (EPS) by an average of 91% per year (using a line of best fit). Its revenue is up 15% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Cheniere Energy, Inc. Been A Good Investment?
I think that the total shareholder return of 42%, over three years, would leave most Cheniere Energy, Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
We compared total CEO remuneration at Cheniere Energy, Inc. with the amount paid at other large 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. Even better, returns to shareholders have been plentiful, over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. So you may want to check if insiders are buying Cheniere Energy shares with their own money (free access).
If you want to buy a stock that is better than Cheniere Energy, this free list of high return, low debt companies is a great place to look.
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