Yahoo Finance Does Tullow Oil plc's (LON:TLW) CEO Pay Reflect Performance?
Paul McDade became the CEO of Tullow Oil plc (LON:TLW) in 2017. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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 method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Tullow Oil
How Does Paul McDade's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Tullow Oil plc has a market cap of UK£3.0b, and reported total annual CEO compensation of US$2.8m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$747k. 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 from UK£1.6b to UK£5.0b, and the median CEO total compensation was UK£1.8m.
As you can see, Paul McDade is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Tullow Oil plc is paying too much. 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 Tullow Oil, below.
Is Tullow Oil plc Growing?
On average over the last three years, Tullow Oil plc has grown earnings per share (EPS) by 116% each year (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.
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. It could be important to check this free visual depiction of what analysts expect for the future.
Has Tullow Oil plc Been A Good Investment?
With a three year total loss of 4.0%, Tullow Oil plc would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
We examined the amount Tullow Oil plc pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. 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 Tullow Oil 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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.
