Kelly Hoffman became the CEO of Ring Energy, Inc. (NYSEMKT:REI) in 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Kelly Hoffman's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Ring Energy, Inc. has a market cap of US$119m, and is paying total annual CEO compensation of US$1.1m. (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$235k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$479k.
Thus we can conclude that Kelly Hoffman receives more in total compensation than the median of a group of companies in the same market, and of similar size to Ring Energy, Inc.. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Ring Energy has changed over time.
Is Ring Energy, Inc. Growing?
Over the last three years Ring Energy, Inc. has grown its earnings per share (EPS) by an average of 127% per year (using a line of best fit). It achieved revenue growth of 54% 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 Ring Energy, Inc. Been A Good Investment?
With a three year total loss of 83%, Ring Energy, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We examined the amount Ring Energy, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Ring Energy.
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.
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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.