Roger Jenkins became the CEO of Murphy Oil Corporation (NYSE:MUR) in 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Roger Jenkins's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Murphy Oil Corporation has a market cap of US$3.3b, and is paying total annual CEO compensation of US$13m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$1.3m. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.1m.
Thus we can conclude that Roger Jenkins receives more in total compensation than the median of a group of companies in the same market, and of similar size to Murphy Oil Corporation. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Murphy Oil has changed from year to year.
Is Murphy Oil Corporation Growing?
Murphy Oil Corporation has increased its earnings per share (EPS) by an average of 120% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 57%.
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. It could be important to check this free visual depiction of what analysts expect for the future.
Has Murphy Oil Corporation Been A Good Investment?
Since shareholders would have lost about 22% over three years, some Murphy Oil Corporation shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We examined the amount Murphy Oil Corporation pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Murphy Oil.
If you want to buy a stock that is better than Murphy Oil, this free list of high return, low debt companies is a great place to look.
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