Chris Kendall became the CEO of Denbury Resources Inc. (NYSE:DNR) in 2017. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Chris Kendall's Compensation Compare With Similar Sized Companies?
According to our data, Denbury Resources Inc. has a market capitalization of US$659m, and paid its CEO total annual compensation worth US$5.7m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$775k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.6m.
Thus we can conclude that Chris Kendall receives more in total compensation than the median of a group of companies in the same market, and of similar size to Denbury Resources Inc.. However, this doesn't necessarily mean the pay 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 Denbury Resources has changed over time.
Is Denbury Resources Inc. Growing?
Denbury Resources Inc. has increased its earnings per share (EPS) by an average of 120% a year, over the last three years (using a line of best fit). Its revenue is down 11% over last year.
This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Denbury Resources Inc. Been A Good Investment?
Given the total loss of 62% over three years, many shareholders in Denbury Resources Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We examined the amount Denbury Resources Inc. 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.
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. Whatever your view on compensation, you might want to check if insiders are buying or selling Denbury Resources shares (free trial).
If you want to buy a stock that is better than Denbury Resources, this free list of high return, low debt companies is a great place to look.
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