Jeff Miller became the CEO of Halliburton Company (NYSE:HAL) in 2017. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Jeff Miller's Compensation Compare With Similar Sized Companies?
Our data indicates that Halliburton Company is worth US$7.0b, and total annual CEO compensation was reported as US$17m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$1.4m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$7.5m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Halliburton. On an industry level, roughly 19% of total compensation represents salary and 81% is other remuneration. Readers will want to know that Halliburton pays a modest slice of remuneration through salary, as compared to the wider sector.
Thus we can conclude that Jeff Miller receives more in total compensation than the median of a group of companies in the same market, and of similar size to Halliburton Company. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. The graphic below shows how CEO compensation at Halliburton has changed from year to year.
Is Halliburton Company Growing?
Over the last three years Halliburton Company has seen earnings per share (EPS) move in a positive direction by an average of 107% per year (using a line of best fit). It saw its revenue drop 6.6% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Halliburton Company Been A Good Investment?
Given the total loss of 82% over three years, many shareholders in Halliburton Company are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared the total CEO remuneration paid by Halliburton Company, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Shifting gears from CEO pay for a second, we've spotted 3 warning signs for Halliburton you should be aware of, and 2 of them shouldn't be ignored.
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.
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