Shareholders May Not Be So Generous With Phillips 66's (NYSE:PSX) CEO Compensation And Here's Why

editorial-team@simplywallst.com (Simply Wall St)

9 May 2024 at 6:17 am·3-min read

Key Insights

Phillips 66 to hold its Annual General Meeting on 15th of May
Total pay for CEO Mark Lashier includes US$1.58m salary
Total compensation is 58% above industry average
Phillips 66's total shareholder return over the past three years was 95% while its EPS grew by 65% over the past three years

Under the guidance of CEO Mark Lashier, Phillips 66 (NYSE:PSX) has performed reasonably well recently. As shareholders go into the upcoming AGM on 15th of May, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for Phillips 66

How Does Total Compensation For Mark Lashier Compare With Other Companies In The Industry?

Our data indicates that Phillips 66 has a market capitalization of US$62b, and total annual CEO compensation was reported as US$23m for the year to December 2023. That's a notable increase of 41% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.6m.

On comparing similar companies in the American Oil and Gas industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$15m. Hence, we can conclude that Mark Lashier is remunerated higher than the industry median. Moreover, Mark Lashier also holds US$2.9m worth of Phillips 66 stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	US$1.6m	US$1.3m	7%
Other	US$21m	US$15m	93%
Total Compensation	US$23m	US$16m	100%

Talking in terms of the industry, salary represented approximately 14% of total compensation out of all the companies we analyzed, while other remuneration made up 86% of the pie. It's interesting to note that Phillips 66 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.

Phillips 66's Growth

Phillips 66 has seen its earnings per share (EPS) increase by 65% 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. While it would be good to see revenue growth, profits matter more in the end. 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 Phillips 66 Been A Good Investment?

We think that the total shareholder return of 95%, over three years, would leave most Phillips 66 shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for Phillips 66 you should be aware of, and 1 of them is significant.

Important note: Phillips 66 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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Key Insights

How Does Total Compensation For Mark Lashier Compare With Other Companies In The Industry?

Phillips 66's Growth

Has Phillips 66 Been A Good Investment?

To Conclude...

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