Key Insights

• Murphy Oil's Annual General Meeting to take place on 8th of May
• Total pay for CEO Roger Jenkins includes US$1.07m salary
• The overall pay is 77% above the industry average
• Murphy Oil's EPS grew by 86% over the past three years while total shareholder return over the past three years was 159%

Performance at Murphy Oil Corporation (NYSE:MUR) has been reasonably good and CEO Roger Jenkins has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 8th of May. However, some shareholders will still be cautious of paying the CEO excessively.

Comparing Murphy Oil Corporation's CEO Compensation With The Industry

At the time of writing, our data shows that Murphy Oil Corporation has a market capitalization of US$6.7b, and reported total annual CEO compensation of US$13m for the year to December 2023. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.1m.

On comparing similar companies from the American Oil and Gas industry with market caps ranging from US$4.0b to US$12b, we found that the median CEO total compensation was US$7.5m. This suggests that Roger Jenkins is paid more than the median for the industry. Moreover, Roger Jenkins also holds US$46m worth of Murphy Oil 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 13% of total compensation represents salary and 87% is other remuneration. It's interesting to note that Murphy Oil allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Murphy Oil Corporation's Growth

Murphy Oil Corporation has seen its earnings per share (EPS) increase by 86% a year over the past three years. Its revenue is down 12% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Murphy Oil Corporation Been A Good Investment?

Most shareholders would probably be pleased with Murphy Oil Corporation for providing a total return of 159% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Murphy Oil that you should be aware of before investing.

Important note: Murphy Oil is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.