In 2016 Jim Judge was appointed CEO of Eversource Energy (NYSE:ES). First, this article will compare CEO compensation with compensation at other large companies. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Jim Judge’s Compensation Compare With Similar Sized Companies?
Our data indicates that Eversource Energy is worth US$19.7b, and total annual CEO compensation is US$16m. Notably, that’s an increase of 157% over the year before. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO compensation to be US$11m.
Thus we can conclude that Jim Judge receives more in total compensation than the median of a group of large companies in the same market as Eversource Energy. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Eversource Energy has changed from year to year.
Is Eversource Energy Growing?
Over the last three years Eversource Energy has grown its earnings per share (EPS) by an average of 5.7% per year. It achieved revenue growth of 8.9% over the last year.
I’m not particularly impressed by the revenue growth, but it is good to see modest EPS growth. It’s clear the performance has been quite decent, but it it falls short of outstanding,based on this information.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Eversource Energy Been A Good Investment?
Eversource Energy has generated a total shareholder return of 33% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
We compared total CEO remuneration at Eversource Energy with the amount paid at other large companies. We found that it pays well over the median amount paid in the benchmark group.
Over the last three years returns to investors have been uninspiring, and we would have liked to see stronger business growth. So it’s certainly hard to argue that the CEO is modestly paid, although we don’t see the remuneration as an issue. Shareholders may want to check for free if Eversource Energy insiders are buying or selling shares.
Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.