Should You Worry About California Resources Corporation's (NYSE:CRC) CEO Pay?

Todd Stevens became the CEO of California Resources Corporation (NYSE:CRC) in 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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.

Check out our latest analysis for California Resources

How Does Todd Stevens's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that California Resources Corporation has a market cap of US$280m, and reported total annual CEO compensation of US$7.7m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$867k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO total compensation was US$1.2m.

As you can see, Todd Stevens is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean California Resources Corporation is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at California Resources has changed over time.

Is California Resources Corporation Growing?

Over the last three years California Resources Corporation has shrunk its earnings per share by an average of 1.9% per year (measured with a line of best fit). In the last year, its revenue is down 14%.

In the last three years the company has failed to grow earnings per share. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has California Resources Corporation Been A Good Investment?

Since shareholders would have lost about 69% over three years, some California Resources Corporation shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We examined the amount California Resources Corporation pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us. Over the same period, investors would have come away with nothing in the way of share price gains. In our opinion the CEO might be paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at California Resources.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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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