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A Quick Analysis On Newpark Resources' (NYSE:NR) CEO Compensation

Paul Howes became the CEO of Newpark Resources, Inc. (NYSE:NR) in 2006, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Newpark Resources

How Does Total Compensation For Paul Howes Compare With Other Companies In The Industry?

According to our data, Newpark Resources, Inc. has a market capitalization of US$189m, and paid its CEO total annual compensation worth US$2.9m over the year to December 2019. Notably, that's a decrease of 10% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$821k.

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On examining similar-sized companies in the industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$3.0m. This suggests that Newpark Resources remunerates its CEO largely in line with the industry average. Furthermore, Paul Howes directly owns US$2.1m worth of shares in the company.

Component

2019

2018

Proportion (2019)

Salary

US$821k

US$788k

29%

Other

US$2.0m

US$2.4m

71%

Total Compensation

US$2.9m

US$3.2m

100%

On an industry level, roughly 21% of total compensation represents salary and 79% is other remuneration. Newpark Resources is paying a higher share of its remuneration through a salary in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

Newpark Resources, Inc.'s Growth

Over the last three years, Newpark Resources, Inc. has shrunk its earnings per share by 53% per year. Its revenue is down 28% over the previous year.

The decline in earnings is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Newpark Resources, Inc. Been A Good Investment?

With a three year total loss of 75% for the shareholders, Newpark Resources, Inc. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we touched on above, Newpark Resources, Inc. 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. On the other hand, earnings growth and total shareholder return have been negative for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Newpark Resources that investors should look into moving forward.

Switching gears from Newpark Resources, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.