Yahoo News How Does Oceaneering International's (NYSE:OII) CEO Pay Compare With Company Performance?
Rod Larson has been the CEO of Oceaneering International, Inc. (NYSE:OII) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Oceaneering International pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Oceaneering International
Comparing Oceaneering International, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that Oceaneering International, Inc. has a market capitalization of US$545m, and reported total annual CEO compensation of US$3.6m for the year to December 2019. Notably, that's an increase of 38% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$721k.
On comparing similar companies from the same industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$3.9m. So it looks like Oceaneering International compensates Rod Larson in line with the median for the industry. Furthermore, Rod Larson directly owns US$528k worth of shares in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$721k | US$700k | 20% |
Other | US$2.9m | US$1.9m | 80% |
Total Compensation | US$3.6m | US$2.6m | 100% |
On an industry level, roughly 21% of total compensation represents salary and 79% is other remuneration. Although there is a difference in how total compensation is set, Oceaneering International more or less reflects the market in terms of setting the salary. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Oceaneering International, Inc.'s Growth
Over the last three years, Oceaneering International, Inc. has shrunk its earnings per share by 107% per year. The trailing twelve months of revenue was pretty much the same as the prior period.
The decline in earnings is a bit concerning. And the flat revenue hardly impresses. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Oceaneering International, Inc. Been A Good Investment?
Given the total shareholder loss of 74% over three years, many shareholders in Oceaneering International, Inc. 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...
As we noted earlier, Oceaneering International pays its CEO in line with similar-sized companies belonging to the same industry. In the meantime, the company has reported declining earnings growth and shareholder returns over the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 2 warning signs for Oceaneering International (1 doesn't sit too well with us!) that you should be aware of before investing here.
Important note: Oceaneering International 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.
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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