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We have been pretty impressed with the performance at Murphy USA Inc. (NYSE:MUSA) recently and CEO R. Clyde deserves a mention for their role in it. Coming up to the next AGM on 05 May 2021, shareholders would be keeping this in mind. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.
Comparing Murphy USA Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that Murphy USA Inc. has a market capitalization of US$3.8b, and reported total annual CEO compensation of US$8.2m for the year to December 2020. Notably, that's an increase of 15% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.
For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$7.1m. This suggests that Murphy USA remunerates its CEO largely in line with the industry average. What's more, R. Clyde holds US$24m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Talking in terms of the industry, salary represented approximately 16% of total compensation out of all the companies we analyzed, while other remuneration made up 84% of the pie. It's interesting to note that Murphy USA allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Murphy USA Inc.'s Growth
Over the past three years, Murphy USA Inc. has seen its earnings per share (EPS) grow by 25% per year. In the last year, its revenue is down 21%.
Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Murphy USA Inc. Been A Good Investment?
Boasting a total shareholder return of 120% over three years, Murphy USA Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for Murphy USA (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.
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.
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