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Is Ameren Corporation's (NYSE:AEE) CEO Being Overpaid?

Simply Wall St

In 2014 Warner Baxter was appointed CEO of Ameren Corporation (NYSE:AEE). This analysis aims first to contrast CEO compensation with other large 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.

View our latest analysis for Ameren

How Does Warner Baxter's Compensation Compare With Similar Sized Companies?

Our data indicates that Ameren Corporation is worth US$19b, and total annual CEO compensation was reported as US$8.5m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.1m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

So Warner Baxter is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at Ameren has changed from year to year.

NYSE:AEE CEO Compensation, December 22nd 2019

Is Ameren Corporation Growing?

Over the last three years Ameren Corporation has grown its earnings per share (EPS) by an average of 9.3% per year (using a line of best fit). In the last year, its revenue is down 4.1%.

I would prefer it if there was revenue growth, but the improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. Shareholders might be interested in this free visualization of analyst forecasts.

Has Ameren Corporation Been A Good Investment?

Boasting a total shareholder return of 59% over three years, Ameren Corporation has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Remuneration for Warner Baxter is close enough to the median pay for a CEO of a large company .

While we would like to see improved growth metrics, there is no doubt that the total returns have been great, over the last three years. So considering most shareholders would be happy, we'd say the CEO pay is appropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Ameren.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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. Thank you for reading.