In 2015 John Christmann was appointed CEO of Apache Corporation (NYSE:APA). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. 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 John Christmann's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Apache Corporation has a market cap of US$8.2b, and is paying total annual CEO compensation of US$15m. (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$1.3m. We looked at a group of companies with market capitalizations from US$4.0b to US$12b, and the median CEO total compensation was US$6.8m.
It would therefore appear that Apache Corporation pays John Christmann 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, below, how CEO compensation at Apache has changed over time.
Is Apache Corporation Growing?
Apache Corporation has increased its earnings per share (EPS) by an average of 115% a year, over the last three years (using a line of best fit). It achieved revenue growth of 3.1% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.
Has Apache Corporation Been A Good Investment?
Given the total loss of 54% over three years, many shareholders in Apache Corporation are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at Apache Corporation with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. So you may want to check if insiders are buying Apache shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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