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Is Devon Energy Corporation's (NYSE:DVN) CEO Overpaid Relative To Its Peers?

Simply Wall St

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Dave Hager has been the CEO of Devon Energy Corporation (NYSE:DVN) since 2015. First, this article will compare CEO compensation with compensation at other large companies. Then we'll look at a snap shot of the business growth. 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.

View our latest analysis for Devon Energy

How Does Dave Hager's Compensation Compare With Similar Sized Companies?

According to our data, Devon Energy Corporation has a market capitalization of US$12b, and pays its CEO total annual compensation worth US$12m. (This figure is for the year to December 2018). That's below the compensation, last year. While we always look at total compensation first, we note that the salary component is less, at US$1.3m. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

So Dave Hager receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see, below, how CEO compensation at Devon Energy has changed over time.

NYSE:DVN CEO Compensation, June 22nd 2019

Is Devon Energy Corporation Growing?

Over the last three years Devon Energy Corporation has grown its earnings per share (EPS) by an average of 112% 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. It could be important to check this free visual depiction of what analysts expect for the future.

Has Devon Energy Corporation Been A Good Investment?

With a three year total loss of 19%, Devon Energy Corporation would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Dave Hager is paid around what is normal the leaders of larger companies.

We'd say the company can boast of its EPS growth, but we cannot say the same about the lacklustre shareholder returns (over the last three years). We'd be surprised if shareholders want to see a pay rise for the CEO, but we'd stop short of calling their pay too generous. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Devon Energy.

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.