Yahoo Finance How Should Investors Feel About Nabors Industries Ltd.'s (NYSE:NBR) CEO Pay?
Anthony Petrello has been the CEO of Nabors Industries Ltd. (NYSE:NBR) since 2011. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Nabors Industries
How Does Anthony Petrello's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Nabors Industries Ltd. has a market cap of US$825m, and reported total annual CEO compensation of US$15m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.8m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO total compensation was US$2.5m.
As you can see, Anthony Petrello is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Nabors Industries Ltd. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Nabors Industries has changed over time.
Is Nabors Industries Ltd. Growing?
On average over the last three years, Nabors Industries Ltd. has grown earnings per share (EPS) by 21% each year (using a line of best fit). It achieved revenue growth of 4.3% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.
Has Nabors Industries Ltd. Been A Good Investment?
Since shareholders would have lost about 83% over three years, some Nabors Industries Ltd. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
We compared total CEO remuneration at Nabors Industries Ltd. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. So you may want to check if insiders are buying Nabors Industries shares with their own money (free access).
Important note: Nabors Industries may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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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