In 2016 Jack Fusco was appointed CEO of Cheniere Energy, Inc. (NYSEMKT:LNG). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Jack Fusco's Compensation Compare With Similar Sized Companies?
According to our data, Cheniere Energy, Inc. has a market capitalization of US$17b, and pays its CEO total annual compensation worth US$11m. (This figure is for the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at US$1.3m. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be 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.
So Jack Fusco is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Cheniere Energy has changed from year to year.
Is Cheniere Energy, Inc. Growing?
On average over the last three years, Cheniere Energy, Inc. has grown earnings per share (EPS) by 97% each year (using a line of best fit). It achieved revenue growth of 42% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. It could be important to check this free visual depiction of what analysts expect for the future.
Has Cheniere Energy, Inc. Been A Good Investment?
I think that the total shareholder return of 77%, over three years, would leave most Cheniere Energy, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Remuneration for Jack Fusco is close enough to the median pay for a CEO of a large company .
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. Whatever your view on compensation, you might want to check if insiders are buying or selling Cheniere Energy shares (free trial).
Important note: Cheniere Energy may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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