Shareholders Would Not Be Objecting To CVR Energy, Inc.'s (NYSE:CVI) CEO Compensation And Here's Why

Key Insights

• CVR Energy to hold its Annual General Meeting on 29th of May
• CEO Dave Lamp's total compensation includes salary of US$1.10m
• The total compensation is similar to the average for the industry
• CVR Energy's EPS grew by 89% over the past three years while total shareholder return over the past three years was 137%

It would be hard to discount the role that CEO Dave Lamp has played in delivering the impressive results at CVR Energy, Inc. (NYSE:CVI) recently. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 29th of May. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

Check out our latest analysis for CVR Energy

Comparing CVR Energy, Inc.'s CEO Compensation With The Industry

Our data indicates that CVR Energy, Inc. has a market capitalization of US$3.0b, and total annual CEO compensation was reported as US$4.5m for the year to December 2023. That's a modest increase of 4.2% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.1m.

On examining similar-sized companies in the American Oil and Gas industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$6.2m. From this we gather that Dave Lamp is paid around the median for CEOs in the industry.

Component	2023	2022	Proportion (2023)
Salary	US$1.1m	US$1.1m	24%
Other	US$3.4m	US$3.2m	76%
Total Compensation	US$4.5m	US$4.3m	100%

On an industry level, around 14% of total compensation represents salary and 86% is other remuneration. CVR Energy pays out 24% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at CVR Energy, Inc.'s Growth Numbers

CVR Energy, Inc. has seen its earnings per share (EPS) increase by 89% a year over the past three years. It saw its revenue drop 18% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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?

We think that the total shareholder return of 137%, over three years, would leave most CVR Energy, Inc. shareholders smiling. 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...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 3 warning signs for CVR Energy you should be aware of, and 1 of them doesn't sit too well with us.

Switching gears from CVR Energy, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.