Does Ring Energy, Inc.’s (NYSEMKT:REI) CEO Salary Reflect Performance?
Kelly Hoffman has been the CEO of Ring Energy, Inc. (NYSEMKT:REI) since 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Ring Energy
How Does Kelly Hoffman’s Compensation Compare With Similar Sized Companies?
According to our data, Ring Energy, Inc. has a market capitalization of US$400m, and pays its CEO total annual compensation worth US$1.1m. (This is based on the year to December 2018). That’s less than last year. While we always look at total compensation first, we note that the salary component is less, at US$235k. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO compensation was US$1.5m.
So Kelly Hoffman receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Ring Energy has changed from year to year.
Is Ring Energy, Inc. Growing?
On average over the last three years, Ring Energy, Inc. has grown earnings per share (EPS) by 97% each year (using a line of best fit). It achieved revenue growth of 89% over the last year.
This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Ring Energy, Inc. Been A Good Investment?
With a total shareholder return of 20% over three years, Ring Energy, Inc. shareholders would, in general, be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
In Summary…
Remuneration for Kelly Hoffman is close enough to the median pay for a CEO of a similar sized company .
Shareholder returns could be better but shareholders would be pleased with the positive EPS growth. So considering these factors, we think the CEO pay is probably quite reasonable. Shareholders may want to check for free if Ring Energy insiders are buying or selling shares.
If you want to buy a stock that is better than Ring Energy, 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 editorial-team@simplywallst.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.
