Gil Goodrich became the CEO of Goodrich Petroleum Corporation (NYSEMKT:GDP) in 1995, 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 Goodrich Petroleum pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Goodrich Petroleum Corporation's CEO Compensation With the industry
According to our data, Goodrich Petroleum Corporation has a market capitalization of US$130m, and paid its CEO total annual compensation worth US$1.2m over the year to December 2019. Notably, that's an increase of 23% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$474k.
In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$675k. Accordingly, our analysis reveals that Goodrich Petroleum Corporation pays Gil Goodrich north of the industry median. Furthermore, Gil Goodrich directly owns US$5.4m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. Goodrich Petroleum is paying a higher share of its remuneration through a salary in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Goodrich Petroleum Corporation's Growth Numbers
Over the last three years, Goodrich Petroleum Corporation has shrunk its earnings per share by 11% per year. Its revenue is down 18% over the previous year.
Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Goodrich Petroleum Corporation Been A Good Investment?
With a total shareholder return of 9.4% over three years, Goodrich Petroleum Corporation has done okay by shareholders. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
As we noted earlier, Goodrich Petroleum pays its CEO higher than the norm for similar-sized companies belonging to the same industry. This doesn't look great when you realize that the company has been suffering from negative EPS growth for the last three years. While shareholder returns are acceptable, they don't delight. So you may want to delve deeper, because we don't think the amount Gil makes is justifiable.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Goodrich Petroleum that you should be aware of before investing.
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.
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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.
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