Why Gulf Keystone Petroleum Limited's (LON:GKP) CEO Pay Matters To You

In 2015 Jón Ferrier was appointed CEO of Gulf Keystone Petroleum Limited (LON:GKP). 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Gulf Keystone Petroleum

How Does Jón Ferrier's Compensation Compare With Similar Sized Companies?

Our data indicates that Gulf Keystone Petroleum Limited is worth UK£500m, and total annual CEO compensation is US$1m. We note that's an increase of 107% above last year. We examined companies with market caps from UK£312m to UK£1.2b, and discovered that the median CEO compensation of that group was UK£412k.

It would therefore appear that Gulf Keystone Petroleum Limited pays Jón Ferrier 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.

The graphic below shows how CEO compensation at Gulf Keystone Petroleum has changed from year to year.

Is Gulf Keystone Petroleum Limited Growing?

Gulf Keystone Petroleum Limited has increased its earnings per share (EPS) by an average of 108% a year, over the last three years It achieved revenue growth of 23% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing.

It could be important to check this free visual depiction of what analysts expect for the future.

Has Gulf Keystone Petroleum Limited Been A Good Investment?

Given the total loss of 92% over three years, many shareholders in Gulf Keystone Petroleum Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared total CEO remuneration at Gulf Keystone Petroleum Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. So shareholders might not feel great about the fact that CEO pay increased on last year. 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. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Gulf Keystone Petroleum Limited (free visualization of insider trades).

Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.