In 2005 Larry Pinkston was appointed CEO of Unit Corporation (NYSE:UNT). First, this article will compare CEO compensation with compensation at similar sized companies. 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 Larry Pinkston's Compensation Compare With Similar Sized Companies?
According to our data, Unit Corporation has a market capitalization of US$42m, and paid its CEO total annual compensation worth US$4.1m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$862k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$529k.
Thus we can conclude that Larry Pinkston receives more in total compensation than the median of a group of companies in the same market, and of similar size to Unit Corporation. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Unit has changed from year to year.
Is Unit Corporation Growing?
On average over the last three years, Unit Corporation has grown earnings per share (EPS) by 26% each year (using a line of best fit). Its revenue is down 13% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Unit Corporation Been A Good Investment?
With a three year total loss of 97%, Unit Corporation would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
We examined the amount Unit Corporation pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. On the other hand returns to investors over the same period have probably disappointed many. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Unit.
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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