Greg Vesey has been the CEO of Liquefied Natural Gas Limited (ASX:LNG) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
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How Does Greg Vesey's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Liquefied Natural Gas Limited has a market cap of AU$220m, and is paying total annual CEO compensation of AU$1.2m. (This number is for the twelve months until June 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$847k. We examined companies with market caps from AU$143m to AU$572m, and discovered that the median CEO total compensation of that group was AU$759k.
As you can see, Greg Vesey is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Liquefied Natural Gas Limited is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Liquefied Natural Gas has changed from year to year.
Is Liquefied Natural Gas Limited Growing?
Liquefied Natural Gas Limited has increased its earnings per share (EPS) by an average of 71% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 71%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. You might want to check this free visual report on analyst forecasts for future earnings.
Has Liquefied Natural Gas Limited Been A Good Investment?
Since shareholders would have lost about 25% over three years, some Liquefied Natural Gas Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We examined the amount Liquefied Natural Gas Limited 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. However, the returns to investors are far less impressive, over the same period. 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. Shareholders may want to check for free if Liquefied Natural Gas insiders are buying or selling shares.
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.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.