Does Cairn Energy PLC's (LON:CNE) CEO Pay Compare Well With Peers?
Simon Thomson has been the CEO of Cairn Energy PLC (LON:CNE) since 2011. 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. 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.
Check out our latest analysis for Cairn Energy
How Does Simon Thomson's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Cairn Energy PLC has a market cap of UK£1.0b, and reported total annual CEO compensation of US$2.2m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$566k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO total compensation was US$1.8m.
So Simon Thomson is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Cairn Energy has changed over time.
Is Cairn Energy PLC Growing?
Over the last three years Cairn Energy PLC has shrunk its earnings per share by an average of 71% per year (measured with a line of best fit). It achieved revenue growth of 143% over the last year.
The reduction in earnings per share, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. It could be important to check this free visual depiction of what analysts expect for the future.
Has Cairn Energy PLC Been A Good Investment?
Given the total loss of 12% over three years, many shareholders in Cairn Energy PLC are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Simon Thomson is paid around what is normal the leaders of comparable size companies.
The per share growth could be better, in our view. And we think the shareholder returns - over three years - have been underwhelming. So many would argue that the CEO is certainly not underpaid. So you may want to check if insiders are buying Cairn Energy shares with their own money (free access).
Important note: Cairn Energy 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.
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.
