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Our Take On Clearway Energy's (NYSE:CWEN.A) CEO Salary

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Simply Wall St
·4 min read
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This article will reflect on the compensation paid to Chris Sotos who has served as CEO of Clearway Energy, Inc. (NYSE:CWEN.A) since 2016. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Clearway Energy.

View our latest analysis for Clearway Energy

How Does Total Compensation For Chris Sotos Compare With Other Companies In The Industry?

According to our data, Clearway Energy, Inc. has a market capitalization of US$5.2b, and paid its CEO total annual compensation worth US$3.1m over the year to December 2019. We note that's an increase of 27% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$606k.

For comparison, other companies in the same industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$203k. This suggests that Chris Sotos is paid more than the median for the industry. What's more, Chris Sotos holds US$3.5m 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$606k

US$500k

20%

Other

US$2.4m

US$1.9m

80%

Total Compensation

US$3.1m

US$2.4m

100%

Speaking on an industry level, nearly 16% of total compensation represents salary, while the remainder of 84% is other remuneration. Clearway Energy is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

Clearway Energy, Inc.'s Growth

Clearway Energy, Inc. saw earnings per share stay pretty flat over the last three years. It achieved revenue growth of 9.4% over the last year.

We're not particularly impressed by the revenue growth, but we're happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Clearway Energy, Inc. Been A Good Investment?

We think that the total shareholder return of 63%, over three years, would leave most Clearway Energy, Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

As we touched on above, Clearway Energy, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Importantly though, shareholder returns for the last three years have been excellent. Albeit, earnings growth has not been as impressive over the same time frame. All things considered, we don't think there's a reason to criticize CEO compensation, though we hope Clearway Energy will post healthier earnings growth moving forward.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 5 warning signs for Clearway Energy (of which 2 don't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Important note: Clearway Energy 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.

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.