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This article will reflect on the compensation paid to Tyler Glover who has served as CEO of Texas Pacific Land Trust (NYSE:TPL) since 2016. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Tyler Glover Compare With Other Companies In The Industry?
At the time of writing, our data shows that Texas Pacific Land Trust has a market capitalization of US$3.6b, and reported total annual CEO compensation of US$3.8m for the year to December 2019. We note that's an increase of 64% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$800k.
On comparing similar companies from the same industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$6.6m. That is to say, Tyler Glover is paid under the industry median.
Talking in terms of the industry, salary represented approximately 16% of total compensation out of all the companies we analyzed, while other remuneration made up 84% of the pie. Texas Pacific Land Trust is paying a higher share of its remuneration through a salary in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Texas Pacific Land Trust's Growth Numbers
Over the past three years, Texas Pacific Land Trust has seen its earnings per share (EPS) grow by 54% per year. It saw its revenue drop 18% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Texas Pacific Land Trust Been A Good Investment?
Texas Pacific Land Trust has generated a total shareholder return of 24% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
As we touched on above, Texas Pacific Land Trust is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But over the last three years, EPS growth has been growing rapidly, which is a great sign for the company. However, shareholder returns have failed to show the same level of growth. We would wish for better returns (whether dividends or capital gains) but we do admire the solidEPS growth on show here. As a result of these considerations, CEO compensation seems quite appropriate.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 2 warning signs for Texas Pacific Land Trust you should be aware of, and 1 of them is a bit unpleasant.
Important note: Texas Pacific Land Trust is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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