Yahoo Finance Does Gulf Keystone Petroleum Limited's (LON:GKP) CEO Salary Reflect Performance?
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Jón Ferrier became the CEO of Gulf Keystone Petroleum Limited (LON:GKP) in 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
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£503m, and pays its CEO total annual compensation worth US$973k. (This number is for the twelve months until December 2018). While we always look at total compensation first, we note that the salary component is less, at US$450k. When we examined a selection of companies with market caps ranging from UK£320m to UK£1.3b, we found the median CEO total compensation was UK£915k.
That means Jón Ferrier receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Gulf Keystone Petroleum has changed from year to year.
Is Gulf Keystone Petroleum Limited Growing?
On average over the last three years, Gulf Keystone Petroleum Limited has grown earnings per share (EPS) by 131% each year (using a line of best fit). Its revenue is up 45% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Gulf Keystone Petroleum Limited Been A Good Investment?
Given the total loss of 48% over three years, many shareholders in Gulf Keystone Petroleum Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Jón Ferrier is paid around what is normal the leaders of comparable size companies.
We like that the company is growing EPS, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Gulf Keystone Petroleum.
Important note: Gulf Keystone Petroleum may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
