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John Lindsay has been the CEO of Helmerich & Payne, Inc. (NYSE:HP) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Helmerich & Payne.
Comparing Helmerich & Payne, Inc.'s CEO Compensation With the industry
According to our data, Helmerich & Payne, Inc. has a market capitalization of US$2.8b, and paid its CEO total annual compensation worth US$6.6m over the year to September 2020. We note that's a decrease of 14% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.
For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$6.0m. From this we gather that John Lindsay is paid around the median for CEOs in the industry. What's more, John Lindsay holds US$9.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 21% of total compensation represents salary, while the remainder of 79% is other remuneration. It's interesting to note that Helmerich & Payne allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Helmerich & Payne, Inc.'s Growth Numbers
Over the last three years, Helmerich & Payne, Inc. has shrunk its earnings per share by 102% per year. Its revenue is down 37% over the previous year.
Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Helmerich & Payne, Inc. Been A Good Investment?
Since shareholders would have lost about 56% over three years, some Helmerich & Payne, Inc. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As previously discussed, John is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which doesn't sit too well with us) in Helmerich & Payne we think you should know about.
Switching gears from Helmerich & Payne, 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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