Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Larry Pinkston has been the CEO of Unit Corporation (NYSE:UNT) since 2005. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Larry Pinkston's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Unit Corporation has a market cap of US$557m, and is paying total annual CEO compensation of US$4.1m. (This number is for the twelve months until December 2018). That's less than last year. We think total compensation is more important but we note that the CEO salary is lower, at US$862k. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$1.8m.
Thus we can conclude that Larry Pinkston receives more in total compensation than the median of a group of companies in the same market, and of similar size to Unit Corporation. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Unit has changed from year to year.
Is Unit Corporation Growing?
Unit Corporation has increased its earnings per share (EPS) by an average of 117% a year, over the last three years (using a line of best fit). It achieved revenue growth of 7.6% over the last year.
This demonstrates that the company has been improving recently. A good result. It's also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.
Has Unit Corporation Been A Good Investment?
With a three year total loss of 26%, Unit Corporation would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at Unit Corporation with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. However, the returns to investors are far less impressive, over the same period. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Shareholders may want to check for free if Unit 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.
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 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.