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Roger Jenkins has been the CEO of Murphy Oil Corporation (NYSE:MUR) since 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Roger Jenkins’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Murphy Oil Corporation has a market cap of US$4.3b, and is paying total annual CEO compensation of US$13m. (This number is for the twelve months until December 2018). That’s just a smallish increase of 2.9% on last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.3m. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.2m.
As you can see, Roger Jenkins is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Murphy Oil Corporation 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, below, how CEO compensation at Murphy Oil has changed over time.
Is Murphy Oil Corporation Growing?
Murphy Oil Corporation has increased its earnings per share (EPS) by an average of 123% a year, over the last three years (using a line of best fit). Its revenue is up 41% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. Shareholders might be interested in this free visualization of analyst forecasts.
Has Murphy Oil Corporation Been A Good Investment?
With a three year total loss of 9.2%, Murphy Oil Corporation would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We compared the total CEO remuneration paid by Murphy Oil Corporation, and compared it to remuneration at a group of similar sized 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. Having said that, shareholders may be disappointed with the weak returns over the last three years. Considering the per share profit growth, but keeping in mind the weak returns, we’d need more time to form a view on CEO compensation. So you may want to check if insiders are buying Murphy 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 email@example.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.