Yahoo Finance Shareholders May Not Be So Generous With Chevron Corporation's (NYSE:CVX) CEO Compensation And Here's Why
Key Insights
Chevron to hold its Annual General Meeting on 29th of May
Salary of US$1.82m is part of CEO Mike Wirth's total remuneration
Total compensation is 82% above industry average
Chevron's EPS grew by 40% over the past three years while total shareholder return over the past three years was 71%
Under the guidance of CEO Mike Wirth, Chevron Corporation (NYSE:CVX) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 29th of May. However, some shareholders will still be cautious of paying the CEO excessively.
Check out our latest analysis for Chevron
Comparing Chevron Corporation's CEO Compensation With The Industry
Our data indicates that Chevron Corporation has a market capitalization of US$295b, and total annual CEO compensation was reported as US$26m for the year to December 2023. We note that's an increase of 12% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.8m.
On comparing similar companies in the American Oil and Gas industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$15m. This suggests that Mike Wirth is paid more than the median for the industry. Moreover, Mike Wirth also holds US$51m worth of Chevron stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.8m | US$1.7m | 7% |
Other | US$25m | US$22m | 93% |
Total Compensation | US$26m | US$24m | 100% |
Speaking on an industry level, nearly 14% of total compensation represents salary, while the remainder of 86% is other remuneration. It's interesting to note that Chevron allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Chevron Corporation's Growth Numbers
Chevron Corporation's earnings per share (EPS) grew 40% per year over the last three years. It saw its revenue drop 17% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. 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 Chevron Corporation Been A Good Investment?
Most shareholders would probably be pleased with Chevron Corporation for providing a total return of 71% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Chevron that investors should think about before committing capital to this stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
