Yahoo Finance How Should Investors React To Rockhopper Exploration plc's (LON:RKH) CEO Pay?
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Sam Moody has been the CEO of Rockhopper Exploration plc (LON:RKH) since 2010. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Rockhopper Exploration
How Does Sam Moody's Compensation Compare With Similar Sized Companies?
According to our data, Rockhopper Exploration plc has a market capitalization of UK£97m, and pays its CEO total annual compensation worth US$540k. (This is based on the year to December 2018). That's just a smallish increase of 2.9% on last year. While we always look at total compensation first, we note that the salary component is less, at US$373k. We examined a group of similar sized companies, with market capitalizations of below UK£158m. The median CEO total compensation in that group is UK£251k.
It would therefore appear that Rockhopper Exploration plc pays Sam Moody 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.
The graphic below shows how CEO compensation at Rockhopper Exploration has changed from year to year.
Is Rockhopper Exploration plc Growing?
Rockhopper Exploration plc has reduced its earnings per share by an average of 89% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 1.7% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. The fairly low revenue growth fails to impress given that the earnings per share is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.
Has Rockhopper Exploration plc Been A Good Investment?
With a three year total loss of 44%, Rockhopper Exploration 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 compared the total CEO remuneration paid by Rockhopper Exploration plc, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
Over the same period, investors would have come away with nothing in the way of share price gains. This analysis suggests to us that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Rockhopper Exploration.
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.
