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Steve Kean became the CEO of Kinder Morgan, Inc. (NYSE:KMI) in 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Steve Kean's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Kinder Morgan, Inc. has a market cap of US$46b, and is paying total annual CEO compensation of US$17m. (This is based on the year to December 2018). We note that's an increase of 4326% above last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
It would therefore appear that Kinder Morgan, Inc. pays Steve Kean more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Kinder Morgan, below.
Is Kinder Morgan, Inc. Growing?
Over the last three years Kinder Morgan, Inc. has grown its earnings per share (EPS) by an average of 49% per year (using a line of best fit). In the last year, its revenue is up 3.3%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.
Has Kinder Morgan, Inc. Been A Good Investment?
With a total shareholder return of 26% over three years, Kinder Morgan, Inc. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
We compared the total CEO remuneration paid by Kinder Morgan, Inc., and compared it to remuneration at a group of other large companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. We also note that, over the same time frame, shareholder returns haven't been bad. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't call the CEO pay problematic. Whatever your view on compensation, you might want to check if insiders are buying or selling Kinder Morgan shares (free trial).
If you want to buy a stock that is better than Kinder Morgan, this free list of high return, low debt companies is a great place to look.
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.