Should You Be Pleased About The CEO Pay At Murphy Oil Corporation's (NYSE:MUR)

Roger Jenkins has been the CEO of Murphy Oil Corporation (NYSE:MUR) since 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Murphy Oil

How Does Roger Jenkins's Compensation Compare With Similar Sized Companies?

Our data indicates that Murphy Oil Corporation is worth US$3.4b, and total annual CEO compensation was reported as US$13m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.3m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.1m.

It would therefore appear that Murphy Oil Corporation pays Roger Jenkins 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 better assess whether the pay is overly generous by looking into the underlying business performance. You might want to check this free visual report on analyst forecasts for future earnings.

You can see, below, how CEO compensation at Murphy Oil has changed over time.

Is Murphy Oil Corporation Growing?

Over the last three years Murphy Oil Corporation has grown its earnings per share (EPS) by an average of 120% per year (using a line of best fit). Its revenue is up 57% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see.

Has Murphy Oil Corporation Been A Good Investment?

Given the total loss of 23% over three years, many shareholders in Murphy Oil Corporation are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared total CEO remuneration at Murphy Oil Corporation with the amount paid at companies with a similar market capitalization. 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. 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. So you may want to check if insiders are buying Murphy Oil shares with their own money (free access).

If you want to buy a stock that is better than Murphy Oil, 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.