Is Cabot Oil & Gas Corporation’s (NYSE:COG) CEO Being Overpaid?

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Dan Dinges has been the CEO of Cabot Oil & Gas Corporation (NYSE:COG) since 2002. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Cabot Oil & Gas

How Does Dan Dinges’s Compensation Compare With Similar Sized Companies?

Our data indicates that Cabot Oil & Gas Corporation is worth US$10b, and total annual CEO compensation is US$13m. (This number is for the twelve months until December 2018). While we always look at total compensation first, we note that the salary component is less, at US$1.0m. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts – even though some are quite a bit bigger than others).

So Dan Dinges is paid around the average of the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see, below, how CEO compensation at Cabot Oil & Gas has changed over time.

NYSE:COG CEO Compensation, July 9th 2019
NYSE:COG CEO Compensation, July 9th 2019

Is Cabot Oil & Gas Corporation Growing?

Over the last three years Cabot Oil & Gas Corporation has grown its earnings per share (EPS) by an average of 115% per year (using a line of best fit). It achieved revenue growth of 33% over the last year.

This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business.

Has Cabot Oil & Gas Corporation Been A Good Investment?

Since shareholders would have lost about 4.5% over three years, some Cabot Oil & Gas Corporation shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

Remuneration for Dan Dinges is close enough to the median pay for a CEO of a large company .

We think that the EPS growth is very pleasing, but it’s disappointing to see negative shareholder returns over three years. We’d be surprised if shareholders want to see a pay rise for the CEO, but we’d stop short of calling their pay too generous. So you may want to check if insiders are buying Cabot Oil & Gas shares with their own money (free access).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.