This article will reflect on the compensation paid to Terry Spencer who has served as CEO of ONEOK, Inc. (NYSE:OKE) since 2014. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for ONEOK.
Check out our latest analysis for ONEOK
How Does Total Compensation For Terry Spencer Compare With Other Companies In The Industry?
At the time of writing, our data shows that ONEOK, Inc. has a market capitalization of US$12b, and reported total annual CEO compensation of US$11m for the year to December 2019. Notably, that's an increase of 54% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$825k.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$15m. This suggests that ONEOK remunerates its CEO largely in line with the industry average. What's more, Terry Spencer holds US$17m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | US$825k | US$800k | 8% |
| Other | US$10m | US$6.3m | 92% |
| Total Compensation | US$11m | US$7.1m | 100% |
Talking in terms of the industry, salary represented approximately 16% of total compensation out of all the companies we analyzed, while other remuneration made up 84% of the pie. ONEOK pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at ONEOK, Inc.'s Growth Numbers
Over the last three years, ONEOK, Inc. has shrunk its earnings per share by 2.6% per year. It saw its revenue drop 26% over the last year.
A lack of EPS improvement is not good to see. 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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has ONEOK, Inc. Been A Good Investment?
Since shareholders would have lost about 38% over three years, some ONEOK, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
As we noted earlier, ONEOK pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 6 warning signs for ONEOK you should be aware of, and 2 of them don't sit too well with us.
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.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
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How Much Is ONEOK, Inc. (NYSE:OKE) Paying Its CEO? - Yahoo Finance
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