Here's Why Shareholders May Want To Be Cautious With Increasing APA Corporation's (NASDAQ:APA) CEO Pay Packet

Key Insights

• APA to hold its Annual General Meeting on 22nd of May
• CEO John Christmann's total compensation includes salary of US$1.30m
• The total compensation is 35% higher than the average for the industry
• Over the past three years, APA's EPS fell by 25% and over the past three years, the total loss to shareholders 51%

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The underwhelming share price performance of APA Corporation (NASDAQ:APA) in the past three years would have disappointed many shareholders. Per share earnings growth is also lacking, despite revenue growth. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 22nd of May, where they can impact on future company performance by voting on resolutions, including executive compensation. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

See our latest analysis for APA

Comparing APA Corporation's CEO Compensation With The Industry

Our data indicates that APA Corporation has a market capitalization of US$6.7b, and total annual CEO compensation was reported as US$11m for the year to December 2024. That's a notable decrease of 17% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.3m.

On comparing similar companies from the American Oil and Gas industry with market caps ranging from US$4.0b to US$12b, we found that the median CEO total compensation was US$8.5m. Accordingly, our analysis reveals that APA Corporation pays John Christmann north of the industry median. What's more, John Christmann holds US$15m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	US$1.3m	US$1.3m	11%
Other	US$10m	US$12m	89%
Total Compensation	US$11m	US$14m	100%

Speaking on an industry level, nearly 14% of total compensation represents salary, while the remainder of 86% is other remuneration. APA sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

APA Corporation's Growth

Over the last three years, APA Corporation has shrunk its earnings per share by 25% per year. It achieved revenue growth of 25% over the last year.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has APA Corporation Been A Good Investment?

The return of -51% over three years would not have pleased APA Corporation shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for APA that you should be aware of before investing.

Switching gears from APA, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.