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This article will reflect on the compensation paid to Samuel Norton who has served as CEO of Overseas Shipholding Group, Inc. (NYSE:OSG) since 2016. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Overseas Shipholding Group, Inc.'s CEO Compensation With the industry
Our data indicates that Overseas Shipholding Group, Inc. has a market capitalization of US$182m, and total annual CEO compensation was reported as US$2.0m for the year to December 2019. Notably, that's a decrease of 40% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$425k.
In comparison with other companies in the industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$2.6m. From this we gather that Samuel Norton is paid around the median for CEOs in the industry. Moreover, Samuel Norton also holds US$3.2m worth of Overseas Shipholding Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. According to our research, Overseas Shipholding Group has allocated a higher percentage of pay to salary in comparison to the wider 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 Overseas Shipholding Group, Inc.'s Growth Numbers
Over the past three years, Overseas Shipholding Group, Inc. has seen its earnings per share (EPS) grow by 23% per year. Its revenue is up 14% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Overseas Shipholding Group, Inc. Been A Good Investment?
Since shareholders would have lost about 18% over three years, some Overseas Shipholding Group, Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we noted earlier, Overseas Shipholding Group pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, the company has logged negative shareholder returns over the previous three years. But EPS growth is moving in a favorable direction, certainly a positive sign. Considering positive EPS growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 2 warning signs (and 1 which is significant) in Overseas Shipholding Group we think you should know about.
Important note: Overseas Shipholding Group 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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