Should You Worry About Carrizo Oil & Gas, Inc.’s (NASDAQ:CRZO) CEO Pay Cheque?

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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. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Carrizo Oil & Gas

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

According to our data, Carrizo Oil & Gas, Inc. has a market capitalization of US$1.1b, and pays its CEO total annual compensation worth US$5.7m. (This is based on the year to December 2018). That’s less than last year. While we always look at total compensation first, we note that the salary component is less, at US$670k. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.4m.

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 better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at Carrizo Oil & Gas has changed from year to year.

NasdaqGS:CRZO CEO Compensation, May 7th 2019
NasdaqGS:CRZO CEO Compensation, May 7th 2019

Is Carrizo Oil & Gas, Inc. Growing?

Over the last three years Carrizo Oil & Gas, Inc. has grown its earnings per share (EPS) by an average of 118% per year (using a line of best fit). Its revenue is up 42% over last year.

This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. Shareholders might be interested in this free visualization of analyst forecasts.

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

Since shareholders would have lost about 64% over three years, some Carrizo Oil & Gas, Inc. shareholders would surely be feeling negative emotions. 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. Our data suggests that it pays above the median CEO pay within that 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. While EPS is positive, we’d say shareholders would want better returns before the CEO is paid much more. So you may want to check if insiders are buying Carrizo Oil & Gas shares with their own money (free access).

If you want to buy a stock that is better than Carrizo Oil & Gas, this free list of high return, low debt companies is a great place to look.

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 editorial-team@simplywallst.com. 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.