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In 2017 Darren Woods was appointed CEO of Exxon Mobil Corporation (NYSE:XOM). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. 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 method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for Exxon Mobil
How Does Darren Woods’s Compensation Compare With Similar Sized Companies?
Our data indicates that Exxon Mobil Corporation is worth US$324b, and total annual CEO compensation is US$19m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$1.4m. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.
As you can see, Darren Woods is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean Exxon Mobil 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 a visual representation of the CEO compensation at Exxon Mobil, below.
Is Exxon Mobil Corporation Growing?
On average over the last three years, Exxon Mobil Corporation has grown earnings per share (EPS) by 29% each year (using a line of best fit). In the last year, its revenue is up 12%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business.
Has Exxon Mobil Corporation Been A Good Investment?
Given the total loss of 8.4% over three years, many shareholders in Exxon Mobil Corporation are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary…
We compared total CEO remuneration at Exxon Mobil Corporation with the amount paid at other large companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. However, the returns to investors are far less impressive, over the same period. 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 Exxon Mobil shares with their own money (free access).
If you want to buy a stock that is better than Exxon Mobil, this free list of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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. Thank you for reading.
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2019-07-09 10:33:15Z
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