Is Carrizo Oil & Gas, Inc.’s (NASDAQ:CRZO) CEO Pay Fair?

In 1993 Chip Johnson was appointed CEO of Carrizo Oil & Gas, Inc. (NASDAQ:CRZO). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. 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.

See our latest analysis for Carrizo Oil & Gas

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How Does Chip Johnson’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Carrizo Oil & Gas, Inc. has a market cap of US$1.1b, and is paying total annual CEO compensation of US$5.8m. (This number is for the twelve months until 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$665k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.3m.

It would therefore appear that Carrizo Oil & Gas, Inc. pays Chip Johnson 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 get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at Carrizo Oil & Gas, below.

NasdaqGS:CRZO CEO Compensation January 17th 19
NasdaqGS:CRZO CEO Compensation January 17th 19

Is Carrizo Oil & Gas, Inc. Growing?

Carrizo Oil & Gas, Inc. has increased its earnings per share (EPS) by an average of 98% a year, over the last three years (using a line of best fit). It achieved revenue growth of 61% 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.

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

Has Carrizo Oil & Gas, Inc. Been A Good Investment?

Given the total loss of 41% over three years, many shareholders in Carrizo Oil & Gas, Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

We compared the total CEO remuneration paid by Carrizo Oil & Gas, Inc., 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.

Importantly, though, the company has impressed with its earnings per share growth, over three years. However, the returns to investors are far less impressive, over the same period. 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 Carrizo Oil & Gas shares with their own money (free access).

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.