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A Quick Analysis On DorianG's (NYSE:LPG) CEO Compensation

·3 min read

John Hadjipateras has been the CEO of Dorian LPG Ltd. (NYSE:LPG) since 2013, 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 DorianG.

View our latest analysis for DorianG

How Does Total Compensation For John Hadjipateras Compare With Other Companies In The Industry?

At the time of writing, our data shows that Dorian LPG Ltd. has a market capitalization of US$385m, and reported total annual CEO compensation of US$1.4m for the year to March 2020. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$550k.

On examining similar-sized companies in the industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$1.9m. From this we gather that John Hadjipateras is paid around the median for CEOs in the industry. Moreover, John Hadjipateras also holds US$16m worth of DorianG stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2020

2019

Proportion (2020)

Salary

US$550k

US$550k

40%

Other

US$841k

US$851k

60%

Total Compensation

US$1.4m

US$1.4m

100%

Speaking on an industry level, nearly 16% of total compensation represents salary, while the remainder of 84% is other remuneration. According to our research, DorianG has allocated a higher percentage of pay to salary in comparison to the wider industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

A Look at Dorian LPG Ltd.'s Growth Numbers

Over the past three years, Dorian LPG Ltd. has seen its earnings per share (EPS) grow by 95% per year. In the last year, its revenue is up 79%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Dorian LPG Ltd. Been A Good Investment?

With a total shareholder return of 8.1% over three years, Dorian LPG Ltd. has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

As we noted earlier, DorianG pays its CEO in line with similar-sized companies belonging to the same industry. But EPS growth over the last three years has been impressive, although the same cannot be said for shareholder returns. So considering these factors, we think the compensation is probably quite reasonable, but investor returns need a boost moving forward.

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 is a bit concerning) in DorianG we think you should know about.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.