Is Matador Resources Company (NYSE:MTDR) Overpaying Its CEO?

Joseph Foran has been the CEO of Matador Resources Company (NYSE:MTDR) since 2003. 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. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Matador Resources

How Does Joseph Foran’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Matador Resources Company has a market cap of US$1.8b, and is paying total annual CEO compensation of US$7.4m. (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$1.1m. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.1m.

As you can see, Joseph Foran is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Matador Resources Company is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Matador Resources, below.

NYSE:MTDR CEO Compensation, August 20th 2019
NYSE:MTDR CEO Compensation, August 20th 2019

Is Matador Resources Company Growing?

On average over the last three years, Matador Resources Company has grown earnings per share (EPS) by 101% each year (using a line of best fit). In the last year, its revenue is up 20%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business.

Has Matador Resources Company Been A Good Investment?

With a three year total loss of 31%, Matador Resources Company would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We compared the total CEO remuneration paid by Matador Resources Company, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However we must not forget that the EPS growth has been very strong over three years. However, the returns to investors are far less impressive, over the same period. Considering the per share profit growth, but keeping in mind the weak returns, we’d need more time to form a view on CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling Matador Resources shares (free trial).

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.