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This article will reflect on the compensation paid to Tracy Krohn who has served as CEO of W&T Offshore, Inc. (NYSE:WTI) since 1983. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for W&T Offshore.
Comparing W&T Offshore, Inc.'s CEO Compensation With the industry
Our data indicates that W&T Offshore, Inc. has a market capitalization of US$364m, and total annual CEO compensation was reported as US$5.3m for the year to December 2019. That's a notable decrease of 16% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.
On comparing similar companies from the same industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$2.7m. Accordingly, our analysis reveals that W&T Offshore, Inc. pays Tracy Krohn north of the industry median. Moreover, Tracy Krohn also holds US$122m worth of W&T Offshore stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
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. W&T Offshore is paying a higher share of its remuneration through a salary in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
W&T Offshore, Inc.'s Growth
Over the last three years, W&T Offshore, Inc. has shrunk its earnings per share by 8.4% per year. In the last year, its revenue is down 24%.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has W&T Offshore, Inc. Been A Good Investment?
With a three year total loss of 7.9% for the shareholders, W&T Offshore, Inc. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we touched on above, W&T Offshore, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.
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 5 warning signs for W&T Offshore (of which 2 are a bit concerning!) that you should know about in order to have a holistic understanding of the stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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