Is Matador Resources Company’s (NYSE:MTDR) CEO Salary Justified?

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. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See 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$2.5b, and is paying total annual CEO compensation of US$10m. (This figure is for the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$1.0m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$5.0m.

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. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at Matador Resources has changed over time.

NYSE:MTDR CEO Compensation, April 24th 2019
NYSE:MTDR CEO Compensation, April 24th 2019

Is Matador Resources Company Growing?

Over the last three years Matador Resources Company has grown its earnings per share (EPS) by an average of 117% per year (using a line of best fit). In the last year, its revenue is up 53%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Shareholders might be interested in this free visualization of analyst forecasts.

Has Matador Resources Company Been A Good Investment?

Given the total loss of 2.5% over three years, many shareholders in Matador Resources Company are probably rather dissatisfied, to say the least. 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. As discussed above, we discovered that the company pays more than the median of 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).

If you want to buy a stock that is better than Matador Resources, this free list of high return, low debt companies is a great place to look.

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.