Tony Durrant became the CEO of Premier Oil plc (LON:PMO) in 2014. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Tony Durrant's Compensation Compare With Similar Sized Companies?
Our data indicates that Premier Oil plc is worth UK£616m, and total annual CEO compensation is US$1.6m. (This number is for the twelve months until December 2018). While we always look at total compensation first, we note that the salary component is less, at US$569k. We looked at a group of companies with market capitalizations from UK£332m to UK£1.3b, and the median CEO total compensation was UK£969k.
As you can see, Tony Durrant is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Premier Oil plc is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Premier Oil, below.
Is Premier Oil plc Growing?
On average over the last three years, Premier Oil plc has grown earnings per share (EPS) by 86% each year (using a line of best fit). It achieved revenue growth of 34% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. 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 Premier Oil plc Been A Good Investment?
Given the total loss of 2.8% over three years, many shareholders in Premier Oil plc are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared total CEO remuneration at Premier Oil plc 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, the earnings per share growth over three years is certainly impressive. On the other hand returns to investors over the same period have probably disappointed many. 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. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Premier Oil (free visualization of insider trades).
Important note: Premier Oil may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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