How Does Cabot Oil & Gas' (NYSE:COG) CEO Pay Compare With Company Performance?
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Dan Dinges has been the CEO of Cabot Oil & Gas Corporation (NYSE:COG) since 2002, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Cabot Oil & Gas.
View our latest analysis for Cabot Oil & Gas
Comparing Cabot Oil & Gas Corporation's CEO Compensation With the industry
According to our data, Cabot Oil & Gas Corporation has a market capitalization of US$7.0b, and paid its CEO total annual compensation worth US$14m over the year to December 2019. That's just a smallish increase of 6.0% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.
On examining similar-sized companies in the industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$13m. So it looks like Cabot Oil & Gas compensates Dan Dinges in line with the median for the industry. Furthermore, Dan Dinges directly owns US$73m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$1.1m | US$1.0m | 8% |
Other | US$13m | US$12m | 92% |
Total Compensation | US$14m | US$13m | 100% |
On an industry level, around 19% of total compensation represents salary and 81% is other remuneration. Cabot Oil & Gas sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Cabot Oil & Gas Corporation's Growth
Cabot Oil & Gas Corporation has seen its earnings per share (EPS) increase by 91% a year over the past three years. Its revenue is down 25% over the previous year.
Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Cabot Oil & Gas Corporation Been A Good Investment?
Since shareholders would have lost about 27% over three years, some Cabot Oil & Gas Corporation investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As we noted earlier, Cabot Oil & Gas pays its CEO in line with similar-sized companies belonging to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. However, earnings growth is positive over the same time frame. Considering positive earnings growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Cabot Oil & Gas that investors should think about before committing capital to this stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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