Yahoo Finance Is Kinder Morgan, Inc.'s (NYSE:KMI) CEO Pay Fair?
Steve Kean became the CEO of Kinder Morgan, Inc. (NYSE:KMI) in 2015. This analysis aims first to contrast CEO compensation with other large companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Kinder Morgan
How Does Steve Kean's Compensation Compare With Similar Sized Companies?
According to our data, Kinder Morgan, Inc. has a market capitalization of US$47b, and paid its CEO total annual compensation worth US$17m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.0. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
It would therefore appear that Kinder Morgan, Inc. pays Steve Kean more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Kinder Morgan has changed from year to year.
Is Kinder Morgan, Inc. Growing?
Kinder Morgan, Inc. has increased its earnings per share (EPS) by an average of 57% a year, over the last three years (using a line of best fit). Its revenue is down 6.6% 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. You might want to check this free visual report on analyst forecasts for future earnings.
Has Kinder Morgan, Inc. Been A Good Investment?
Kinder Morgan, Inc. has generated a total shareholder return of 6.2% over three years, so most shareholders wouldn't be too disappointed. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
We compared the total CEO remuneration paid by Kinder Morgan, Inc., and compared it to remuneration at a group of other large companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. We also note that, over the same time frame, shareholder returns haven't been bad. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. Whatever your view on compensation, you might want to check if insiders are buying or selling Kinder Morgan shares (free trial).
If you want to buy a stock that is better than Kinder Morgan, this free list of high return, low debt companies is a great place to look.
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.
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