Here's Why It's Unlikely That Halliburton Company's (NYSE:HAL) CEO Will See A Pay Rise This Year
Halliburton Company (NYSE:HAL) has not performed well recently and CEO Jeff Miller will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 19 May 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.
Check out our latest analysis for Halliburton
Comparing Halliburton Company's CEO Compensation With the industry
According to our data, Halliburton Company has a market capitalization of US$20b, and paid its CEO total annual compensation worth US$22m over the year to December 2020. Notably, that's an increase of 75% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.3m.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$15m. Accordingly, our analysis reveals that Halliburton Company pays Jeff Miller north of the industry median. Furthermore, Jeff Miller directly owns US$20m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$1.3m | US$1.5m | 6% |
Other | US$21m | US$11m | 94% |
Total Compensation | US$22m | US$13m | 100% |
Speaking on an industry level, nearly 22% of total compensation represents salary, while the remainder of 78% is other remuneration. Halliburton pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Halliburton Company's Growth
Over the last three years, Halliburton Company has shrunk its earnings per share by 86% per year. Its revenue is down 41% over the previous year.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Halliburton Company Been A Good Investment?
Few Halliburton Company shareholders would feel satisfied with the return of -54% over three years. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
Whatever your view on compensation, you might want to check if insiders are buying or selling Halliburton shares (free trial).
Switching gears from Halliburton, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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