What Can We Learn About Occidental Petroleum's (NYSE:OXY) CEO Compensation?

By
Simply Wall St
Published
December 02, 2020

Vicki Hollub became the CEO of Occidental Petroleum Corporation (NYSE:OXY) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Occidental Petroleum pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Occidental Petroleum

How Does Total Compensation For Vicki Hollub Compare With Other Companies In The Industry?

At the time of writing, our data shows that Occidental Petroleum Corporation has a market capitalization of US$14b, and reported total annual CEO compensation of US$16m for the year to December 2019. Notably, that's an increase of 13% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.3m.

For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$13m. This suggests that Occidental Petroleum remunerates its CEO largely in line with the industry average. What's more, Vicki Hollub holds US$3.8m worth of shares in the company in their own name.

Component20192018Proportion (2019)
Salary US$1.3m US$1.3m 8%
Other US$15m US$13m 92%
Total CompensationUS$16m US$14m100%

On an industry level, roughly 16% of total compensation represents salary and 84% is other remuneration. Occidental Petroleum sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

NYSE:OXY CEO Compensation December 2nd 2020

Occidental Petroleum Corporation's Growth

Occidental Petroleum Corporation has reduced its earnings per share by 98% a year over the last three years. It achieved revenue growth of 3.7% over the last year.

The decline in EPS is a bit concerning. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Occidental Petroleum Corporation Been A Good Investment?

Since shareholders would have lost about 75% over three years, some Occidental Petroleum Corporation investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As previously discussed, Vicki is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for Occidental Petroleum that you should be aware of before investing.

Important note: Occidental Petroleum is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

Promoted
If you’re looking to trade Occidental Petroleum, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.


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. 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020


Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.


Simply Wall St character - Warren

Simply Wall St

Simply Wall St is a financial technology startup focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of equity analysts with a public, market-beating track record. Learn more about the team behind Simply Wall St.