CVR Energy, Inc. (NYSE:CVI) has not performed well recently and CEO Dave Lamp will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 02 June 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.
How Does Total Compensation For Dave Lamp Compare With Other Companies In The Industry?
According to our data, CVR Energy, Inc. has a market capitalization of US$2.2b, and paid its CEO total annual compensation worth US$3.2m over the year to December 2020. That's a notable decrease of 26% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.
For comparison, other companies in the same industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$3.1m. From this we gather that Dave Lamp is paid around the median for CEOs in the industry.
On an industry level, roughly 20% of total compensation represents salary and 80% is other remuneration. CVR Energy pays out 32% of remuneration in the form of a salary, significantly higher than the industry average. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at CVR Energy, Inc.'s Growth Numbers
CVR Energy, Inc. has reduced its earnings per share by 72% a year over the last three years. Its revenue is down 29% over the previous year.
Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has CVR Energy, Inc. Been A Good Investment?
The return of -32% over three years would not have pleased CVR Energy, Inc. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for CVR Energy that investors should be aware of in a dynamic business environment.
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.
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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. 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.
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