Rod Larson became the CEO of Oceaneering International, Inc. (NYSE:OII) in 2017. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Rod Larson's Compensation Compare With Similar Sized Companies?
Our data indicates that Oceaneering International, Inc. is worth US$1.3b, and total annual CEO compensation was reported as US$2.6m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$700k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$4.0m.
Most shareholders would consider it a positive that Rod Larson takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at Oceaneering International has changed from year to year.
Is Oceaneering International, Inc. Growing?
Oceaneering International, Inc. has reduced its earnings per share by an average of 83% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 8.0%.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Oceaneering International, Inc. Been A Good Investment?
Since shareholders would have lost about 43% over three years, some Oceaneering International, Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
It looks like Oceaneering International, Inc. pays its CEO less than similar sized companies.
Shareholders should note that compensation for Rod Larson is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. We would not call the pay too generous, but nor would we claim the CEO is underpaid, given lacklustre business performance. Shareholders may want to check for free if Oceaneering International 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.