Marc Gerard Edwards has been the CEO of Diamond Offshore Drilling, Inc. (NYSE:DO) since 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Marc Gerard Edwards’s Compensation Compare With Similar Sized Companies?
Our data indicates that Diamond Offshore Drilling, Inc. is worth US$749m, and total annual CEO compensation was reported as US$5.7m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$1.0m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.6m.
It would therefore appear that Diamond Offshore Drilling, Inc. pays Marc Gerard Edwards more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. It could be important to check this free visual depiction of what analysts expect for the future.
The graphic below shows how CEO compensation at Diamond Offshore Drilling has changed from year to year.
Is Diamond Offshore Drilling, Inc. Growing?
On average over the last three years, Diamond Offshore Drilling, Inc. has grown earnings per share (EPS) by 13% each year (using a line of best fit). It saw its revenue drop 23% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business.
Has Diamond Offshore Drilling, Inc. Been A Good Investment?
With a three year total loss of 69%, Diamond Offshore Drilling, Inc. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared total CEO remuneration at Diamond Offshore Drilling, Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Diamond Offshore Drilling.
Important note: Diamond Offshore Drilling may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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