How Much Is Karoon Energy Ltd (ASX:KAR) CEO Getting Paid?

This article will reflect on the compensation paid to Robert Hosking who has served as CEO of Karoon Energy Ltd (ASX:KAR) since 2014. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Karoon Energy.

See our latest analysis for Karoon Energy

Comparing Karoon Energy Ltd's CEO Compensation With the industry

According to our data, Karoon Energy Ltd has a market capitalization of AU$426m, and paid its CEO total annual compensation worth AU$1.0m over the year to June 2020. We note that's a decrease of 13% compared to last year. We note that the salary portion, which stands at AU$579.7k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between AU$279m and AU$1.1b had a median total CEO compensation of AU$1.0m. So it looks like Karoon Energy compensates Robert Hosking in line with the median for the industry. What's more, Robert Hosking holds AU$9.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 76% of total compensation represents salary, while the remainder of 24% is other remuneration. Karoon Energy pays a modest slice of remuneration through salary, as compared to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Karoon Energy Ltd's Growth Numbers

Karoon Energy Ltd's earnings per share (EPS) grew 29% per year over the last three years. In the last year, its revenue is up 70%.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Karoon Energy Ltd Been A Good Investment?

Given the total shareholder loss of 34% over three years, many shareholders in Karoon Energy Ltd are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we touched on above, Karoon Energy Ltd is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. At the same time, the company has logged negative shareholder returns over the last three years. But on the bright side, EPS growth is positive over the same period. Overall, we wouldn't say Robert is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 1 which can't be ignored) in Karoon Energy we think you should know about.

Switching gears from Karoon Energy, 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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