Yahoo Finance Does Gulf Keystone Petroleum Limited’s (LON:GKP) CEO Salary Reflect Performance?
Jón Ferrier became the CEO of Gulf Keystone Petroleum Limited (LON:GKP) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.
View our latest analysis for Gulf Keystone Petroleum
How Does Jón Ferrier’s Compensation Compare With Similar Sized Companies?
According to our data, Gulf Keystone Petroleum Limited has a market capitalization of UK£500m, and pays its CEO total annual compensation worth US$1m. We note that’s an increase of 107% above last year. When we examined a selection of companies with market caps ranging from UK£312m to UK£1.2b, we found the median CEO compensation was UK£412k.
Thus we can conclude that Jón Ferrier receives more in total compensation than the median of a group of companies in the same market, and of similar size to Gulf Keystone Petroleum Limited. 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.
You can see a visual representation of the CEO compensation at Gulf Keystone Petroleum, below.
Is Gulf Keystone Petroleum Limited Growing?
On average over the last three years, Gulf Keystone Petroleum Limited has grown earnings per share (EPS) by 108% each year. Its revenue is up 23% over last year.
This demonstrates that the company has been improving recently. A good result. 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 Gulf Keystone Petroleum Limited Been A Good Investment?
Since shareholders would have lost about 92% over three years, some Gulf Keystone Petroleum Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary…
We examined the amount Gulf Keystone Petroleum Limited pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that 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. This contrasts with the growth in CEO remuneration, in the last year. 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 Gulf Keystone Petroleum Limited shares with their own money (free access).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
