Yahoo Finance Should You Worry About Newpark Resources, Inc.'s (NYSE:NR) CEO Pay Cheque?
In 2006 Paul Howes was appointed CEO of Newpark Resources, Inc. (NYSE:NR). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Newpark Resources
How Does Paul Howes's Compensation Compare With Similar Sized Companies?
According to our data, Newpark Resources, Inc. has a market capitalization of US$558m, and paid its CEO total annual compensation worth US$3.2m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$788k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO total compensation was US$1.7m.
As you can see, Paul Howes is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Newpark Resources, Inc. 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.
The graphic below shows how CEO compensation at Newpark Resources has changed from year to year.
Is Newpark Resources, Inc. Growing?
On average over the last three years, Newpark Resources, Inc. has grown earnings per share (EPS) by 115% each year (using a line of best fit). It saw its revenue drop 2.8% over the last year.
This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Newpark Resources, Inc. Been A Good Investment?
Given the total loss of 26% over three years, many shareholders in Newpark Resources, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
We compared total CEO remuneration at Newpark Resources, Inc. 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. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. Whatever your view on compensation, you might want to check if insiders are buying or selling Newpark Resources shares (free trial).
If you want to buy a stock that is better than Newpark Resources, this free list of high return, low debt companies is a great place to look.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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