In 2012 Ryan Lance was appointed CEO of ConocoPhillips (NYSE:COP). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Ryan Lance's Compensation Compare With Similar Sized Companies?
According to our data, ConocoPhillips has a market capitalization of US$58b, and pays its CEO total annual compensation worth US$23m. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$1.7m. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
As you can see, Ryan Lance is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean ConocoPhillips is paying too much. 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 a visual representation of the CEO compensation at ConocoPhillips, below.
Is ConocoPhillips Growing?
On average over the last three years, ConocoPhillips has grown earnings per share (EPS) by 117% each year (using a line of best fit). It achieved revenue growth of 13% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. It could be important to check this free visual depiction of what analysts expect for the future.
Has ConocoPhillips Been A Good Investment?
ConocoPhillips has served shareholders reasonably well, with a total return of 30% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
We examined the amount ConocoPhillips pays its CEO, and compared it to the amount paid by other large companies. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. We also think investors are doing ok, over the same time period. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't call the CEO pay problematic. So you may want to check if insiders are buying ConocoPhillips shares with their own money (free access).
If you want to buy a stock that is better than ConocoPhillips, this free list of high return, low debt companies is a great place to look.
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 email@example.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.