Is Dril-Quip, Inc.’s (NYSE:DRQ) CEO Overpaid Relative To Its Peers?

Blake DeBerry became the CEO of Dril-Quip, Inc. (NYSE:DRQ) in 2011. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Dril-Quip

How Does Blake DeBerry’s Compensation Compare With Similar Sized Companies?

Our data indicates that Dril-Quip, Inc. is worth US$1.9b, and total annual CEO compensation was reported as US$4.1m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$612k. 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 from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.1m.

So Blake DeBerry receives a similar amount to the median CEO pay, amongst 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.

The graphic below shows how CEO compensation at Dril-Quip has changed from year to year.

NYSE:DRQ CEO Compensation, September 10th 2019
NYSE:DRQ CEO Compensation, September 10th 2019

Is Dril-Quip, Inc. Growing?

On average over the last three years, Dril-Quip, Inc. has shrunk earnings per share by 102% each year (measured with a line of best fit). In the last year, its revenue is down -3.4%.

Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.

Has Dril-Quip, Inc. Been A Good Investment?

With a three year total loss of 6.1%, Dril-Quip, Inc. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

Remuneration for Blake DeBerry is close enough to the median pay for a CEO of a similar sized company .

Returns have been disappointing and the company is not growing its earnings per share. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. So you may want to check if insiders are buying Dril-Quip 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.