Does Hess' (NYSE:HES) CEO Salary Compare Well With The Performance Of The Company?

John Hess has been the CEO of Hess Corporation (NYSE:HES) since 1995, 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 Hess.

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How Does Total Compensation For John Hess Compare With Other Companies In The Industry?

According to our data, Hess Corporation has a market capitalization of US$13b, and paid its CEO total annual compensation worth US$13m over the year to December 2019. That's a fairly small increase of 7.3% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.5m.

For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$13m. From this we gather that John Hess is paid around the median for CEOs in the industry. Moreover, John Hess also holds US$1.1b worth of Hess stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. In Hess' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Hess Corporation's Growth Numbers

Over the past three years, Hess Corporation has seen its earnings per share (EPS) grow by 57% per year. Its revenue is down 19% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Hess Corporation Been A Good Investment?

Given the total shareholder loss of 1.0% over three years, many shareholders in Hess Corporation are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we touched on above, Hess Corporation 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. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. Considering positive EPS growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 3 warning signs for Hess you should be aware of, and 1 of them can't be ignored.

Switching gears from Hess, 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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