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. 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 process should give us an idea about how appropriately the CEO is paid.
How Does Bill Way's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Southwestern Energy Company has a market cap of US$1.0b, and reported total annual CEO compensation of US$8.4m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$880k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.7m.
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 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 Southwestern Energy has changed from year to year.
Is Southwestern Energy Company Growing?
Over the last three years Southwestern Energy Company has grown its earnings per share (EPS) by an average of 130% per year (using a line of best fit). It achieved revenue growth of 15% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Shareholders might be interested in this free visualization of analyst forecasts.
Has Southwestern Energy Company Been A Good Investment?
Given the total loss of 86% over three years, many shareholders in Southwestern Energy Company are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared total CEO remuneration at Southwestern Energy Company with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. 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 shares with their own money (free access).
If you want to buy a stock that is better than Southwestern Energy, this free list of high return, low debt companies is a great place to look.
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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.