We Think Shareholders Will Probably Be Generous With Diamondback Energy, Inc.'s (NASDAQ:FANG) CEO Compensation

Key Insights

• Diamondback Energy will host its Annual General Meeting on 6th of June
• CEO Travis Stice's total compensation includes salary of US$1.35m
• Total compensation is similar to the industry average
• Over the past three years, Diamondback Energy's EPS grew by 61% and over the past three years, the total shareholder return was 169%

The performance at Diamondback Energy, Inc. (NASDAQ:FANG) has been quite strong recently and CEO Travis Stice has played a role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 6th of June. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

Check out our latest analysis for Diamondback Energy

How Does Total Compensation For Travis Stice Compare With Other Companies In The Industry?

According to our data, Diamondback Energy, Inc. has a market capitalization of US$35b, and paid its CEO total annual compensation worth US$18m over the year to December 2023. That's mostly flat as compared to the prior year's compensation. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.4m.

In comparison with other companies in the American Oil and Gas industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$15m. This suggests that Diamondback Energy remunerates its CEO largely in line with the industry average. What's more, Travis Stice holds US$80m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	US$1.4m	US$1.3m	8%
Other	US$16m	US$16m	92%
Total Compensation	US$18m	US$17m	100%

On an industry level, roughly 14% of total compensation represents salary and 86% is other remuneration. Diamondback Energy 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.

Diamondback Energy, Inc.'s Growth

Diamondback Energy, Inc.'s earnings per share (EPS) grew 61% per year over the last three years. Its revenue is down 4.6% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Diamondback Energy, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Diamondback Energy, Inc. for providing a total return of 169% over three years. 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.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Diamondback Energy that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.