Bill Way became the CEO of Southwestern Energy Company (NYSE:SWN) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.
How Does Bill Way’s Compensation Compare With Similar Sized Companies?
Our data indicates that Southwestern Energy Company is worth US$3.1b, and total annual CEO compensation is US$9m. We note that’s an increase of 92% above last year. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO compensation was US$5m.
It would therefore appear that Southwestern Energy Company pays Bill Way more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Southwestern Energy, below.
Is Southwestern Energy Company Growing?
On average over the last three years, Southwestern Energy Company has grown earnings per share (EPS) by 71% each year. Its revenue is up 9.7% over last year.
This demonstrates that the company has been improving recently. A good result. It’s also good to see modest revenue growth, suggesting the underlying business is healthy.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Southwestern Energy Company Been A Good Investment?
With a three year total loss of 57%, Southwestern Energy Company would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
We compared the total CEO remuneration paid by Southwestern Energy Company, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. This doesn’t look great when you consider CEO remuneration is up on last year. While EPS is positive, we’d say shareholders would want better returns before the CEO is paid much more. So you may want to check if insiders are buying Southwestern Energy Company shares with their own money (free access).
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.