It's Unlikely That Chevron Corporation's (NYSE:CVX) CEO Will See A Huge Pay Rise This Year

Key Insights

• Chevron will host its Annual General Meeting on 29th of May
• Total pay for CEO Mike Wirth includes US$1.82m salary
• The total compensation is 82% higher than the average for the industry
• Chevron's total shareholder return over the past three years was 71% while its EPS grew by 40% over the past three years

Performance at Chevron Corporation (NYSE:CVX) has been reasonably good and CEO Mike Wirth has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 29th of May. However, some shareholders will still be cautious of paying the CEO excessively.

View our latest analysis for Chevron

Comparing Chevron Corporation's CEO Compensation With The Industry

According to our data, Chevron Corporation has a market capitalization of US$295b, and paid its CEO total annual compensation worth US$26m over the year to December 2023. Notably, that's an increase of 12% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.8m.

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. Hence, we can conclude that Mike Wirth is remunerated higher than the industry median. Moreover, Mike Wirth also holds US$51m worth of Chevron stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$1.8m	US$1.7m	7%
Other	US$25m	US$22m	93%
Total Compensation	US$26m	US$24m	100%

Speaking on an industry level, nearly 14% of total compensation represents salary, while the remainder of 86% is other remuneration. Chevron pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Chevron Corporation's Growth Numbers

Chevron Corporation has seen its earnings per share (EPS) increase by 40% a year over the past three years. In the last year, its revenue is down 17%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Chevron Corporation Been A Good Investment?

We think that the total shareholder return of 71%, over three years, would leave most Chevron Corporation 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.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

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 2 warning signs for Chevron that investors should be aware of in a dynamic business environment.

Switching gears from Chevron, 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.