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Rick Muncrief has been the CEO of WPX Energy, Inc. (NYSE:WPX) since 2014. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Rick Muncrief’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that WPX Energy, Inc. has a market cap of US$4.9b, and is paying total annual CEO compensation of US$11m. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$895k. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.9m.
It would therefore appear that WPX Energy, Inc. pays Rick Muncrief 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.
You can see a visual representation of the CEO compensation at WPX Energy, below.
Is WPX Energy, Inc. Growing?
WPX Energy, Inc. has increased its earnings per share (EPS) by an average of 67% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 82%.
This demonstrates that the company has been improving recently. A good result. It’s great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly.
Has WPX Energy, Inc. Been A Good Investment?
WPX Energy, Inc. has served shareholders reasonably well, with a total return of 28% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
We examined the amount WPX Energy, Inc. pays its CEO, and compared it to the amount paid by 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. 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. So you may want to check if insiders are buying WPX Energy shares with their own money (free access).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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 firstname.lastname@example.org. 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.