We Think Some Shareholders May Hesitate To Increase Karoon Energy Ltd's (ASX:KAR) CEO Compensation

Key Insights

• Karoon Energy to hold its Annual General Meeting on 22nd of November
• Total pay for CEO Julian Fowles includes US$568.2k salary
• The total compensation is 61% higher than the average for the industry
• Karoon Energy's total shareholder return over the past three years was 128% while its EPS grew by 97% over the past three years

Performance at Karoon Energy Ltd (ASX:KAR) has been reasonably good and CEO Julian Fowles has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 22nd of November. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Karoon Energy

How Does Total Compensation For Julian Fowles Compare With Other Companies In The Industry?

At the time of writing, our data shows that Karoon Energy Ltd has a market capitalization of AU$1.2b, and reported total annual CEO compensation of US$1.5m for the year to June 2023. That's a notable increase of 17% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$568k.

On comparing similar companies from the Australian Oil and Gas industry with market caps ranging from AU$615m to AU$2.5b, we found that the median CEO total compensation was US$933k. Accordingly, our analysis reveals that Karoon Energy Ltd pays Julian Fowles north of the industry median. What's more, Julian Fowles holds AU$1.4m worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	US$568k	US$561k	38%
Other	US$933k	US$726k	62%
Total Compensation	US$1.5m	US$1.3m	100%

On an industry level, roughly 62% of total compensation represents salary and 38% is other remuneration. Karoon Energy pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Karoon Energy Ltd's Growth

Over the past three years, Karoon Energy Ltd has seen its earnings per share (EPS) grow by 97% per year. Its revenue is up 47% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Karoon Energy Ltd Been A Good Investment?

Boasting a total shareholder return of 128% over three years, Karoon Energy Ltd has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 2 warning signs for Karoon Energy that investors should be aware of in a dynamic business environment.

Important note: Karoon Energy is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.