The results at Helix Energy Solutions Group, Inc. (NYSE:HLX) have been quite disappointing recently and CEO Owen Kratz bears some responsibility for this. At the upcoming AGM on 19 May 2021, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.
Comparing Helix Energy Solutions Group, Inc.'s CEO Compensation With the industry
Our data indicates that Helix Energy Solutions Group, Inc. has a market capitalization of US$722m, and total annual CEO compensation was reported as US$5.3m for the year to December 2020. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$598k.
In comparison with other companies in the industry with market capitalizations ranging from US$400m to US$1.6b, the reported median CEO total compensation was US$4.0m. This suggests that Owen Kratz is paid more than the median for the industry. What's more, Owen Kratz holds US$35m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Talking in terms of the industry, salary represented approximately 22% of total compensation out of all the companies we analyzed, while other remuneration made up 78% of the pie. Helix Energy Solutions Group pays a modest slice of remuneration through salary, as compared to the broader 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 Helix Energy Solutions Group, Inc.'s Growth Numbers
Over the last three years, Helix Energy Solutions Group, Inc. has shrunk its earnings per share by 12% per year. Its revenue is down 6.5% 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. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Helix Energy Solutions Group, Inc. Been A Good Investment?
The return of -41% over three years would not have pleased Helix Energy Solutions Group, Inc. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Helix Energy Solutions Group that you should be aware of before investing.
Switching gears from Helix Energy Solutions Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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