Bill Way became the CEO of Southwestern Energy Company (NYSE:SWN) in 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Bill Way's Compensation Compare With Similar Sized Companies?
According to our data, Southwestern Energy Company has a market capitalization of US$2.6b, and pays its CEO total annual compensation worth US$8.7m. (This is based on the year to December 2017). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$876k. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO total compensation was US$4.9m.
As you can see, Bill Way is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Southwestern Energy Company is paying too much. 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 Southwestern Energy has changed over time.
Is Southwestern Energy Company Growing?
Southwestern Energy Company has increased its earnings per share (EPS) by an average of 114% a year, over the last three years (using a line of best fit). Its revenue is up 21% over 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 Southwestern Energy Company Been A Good Investment?
Given the total loss of 54% over three years, many shareholders in Southwestern Energy Company are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
We compared the total CEO remuneration paid by Southwestern Energy Company, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. On the other hand returns to investors over the same period have probably disappointed many. 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 Southwestern Energy shares with their own money (free access).
If you want to buy a stock that is better than Southwestern Energy, this free list of high return, low debt companies is a great place to look.
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