Floyd Wilson became the CEO of Halcón Resources Corporation (NYSE:HK) in 2012. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. 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 Floyd Wilson’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Halcón Resources Corporation has a market cap of US$277m, and is paying total annual CEO compensation of US$7.4m. (This figure is for the year to December 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$800k. When we examined a selection of companies with market caps ranging from US$100m to US$400m, we found the median CEO compensation was US$901k.
It would therefore appear that Halcón Resources Corporation pays Floyd Wilson more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Halcón Resources has changed over time.
Is Halcón Resources Corporation Growing?
Over the last three years Halcón Resources Corporation has grown its earnings per share (EPS) by an average of 130% per year (using a line of best fit). In the last year, its revenue is down -60%.
This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end. It could be important to check this free visual depiction of what analysts expect for the future.
Has Halcón Resources Corporation Been A Good Investment?
Since shareholders would have lost about 91% over three years, some Halcón Resources Corporation shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared the total CEO remuneration paid by Halcón Resources Corporation, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. However, the returns to investors are far less impressive, over the same period. While EPS is positive, we’d say shareholders would want better returns before the CEO is paid much more. So you may want to check if insiders are buying Halcón Resources shares with their own money (free access).
Important note: Halcón Resources may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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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.