money Here's What We Think About PDC Energy's (NASDAQ:PDCE) CEO Pay
Bart Brookman has been the CEO of PDC Energy, Inc. (NASDAQ:PDCE) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for PDC Energy.
See our latest analysis for PDC Energy
Comparing PDC Energy, Inc.'s CEO Compensation With the industry
According to our data, PDC Energy, Inc. has a market capitalization of US$1.7b, and paid its CEO total annual compensation worth US$7.7m over the year to December 2019. Notably, that's an increase of 11% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$850k.
In comparison with other companies in the industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$8.4m. This suggests that PDC Energy remunerates its CEO largely in line with the industry average. Moreover, Bart Brookman also holds US$3.1m worth of PDC Energy stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$850k | US$850k | 11% |
Other | US$6.9m | US$6.1m | 89% |
Total Compensation | US$7.7m | US$7.0m | 100% |
On an industry level, roughly 19% of total compensation represents salary and 81% is other remuneration. PDC Energy pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at PDC Energy, Inc.'s Growth Numbers
Over the last three years, PDC Energy, Inc. has shrunk its earnings per share by 20% per year. Its revenue is down 19% over the previous year.
The decline in earnings is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet 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 PDC Energy, Inc. Been A Good Investment?
Given the total shareholder loss of 58% over three years, many shareholders in PDC Energy, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
As we noted earlier, PDC Energy pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, earnings growth and total shareholder return have been negative for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for PDC Energy (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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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