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How Much Did Kosmos Energy Ltd.'s (NYSE:KOS) CEO Pocket Last Year?

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Andy Inglis has been the CEO of Kosmos Energy Ltd. (NYSE:KOS) since 2014. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Kosmos Energy

How Does Andy Inglis's Compensation Compare With Similar Sized Companies?

Our data indicates that Kosmos Energy Ltd. is worth US$478m, and total annual CEO compensation was reported as US$6.4m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$979k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$2.3m.

Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Speaking on an industry level, we can see that nearly 18% of total compensation represents salary, while the remainder of 82% is other remuneration. So it seems like there isn't a significant difference between Kosmos Energy and the broader market, in terms of salary allocation in the overall compensation package.

As you can see, Andy Inglis is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Kosmos Energy Ltd. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance. The graphic below shows how CEO compensation at Kosmos Energy has changed from year to year.

NYSE:KOS CEO Compensation April 27th 2020
NYSE:KOS CEO Compensation April 27th 2020

Is Kosmos Energy Ltd. Growing?

Kosmos Energy Ltd. has seen earnings per share (EPS) move positively by an average of 52% a year, over the last three years (using a line of best fit). It achieved revenue growth of 68% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. You might want to check this free visual report on analyst forecasts for future earnings.

Has Kosmos Energy Ltd. Been A Good Investment?

Since shareholders would have lost about 79% over three years, some Kosmos Energy Ltd. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared the total CEO remuneration paid by Kosmos Energy Ltd., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

However we must not forget that the EPS growth has been very strong over three years. However, the returns to investors are far less impressive, over the same period. While EPS is moving in the right direction, we'd say shareholders would want better returns before the CEO is paid much more. Shifting gears from CEO pay for a second, we've picked out 2 warning signs for Kosmos Energy that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.

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. Thank you for reading.