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Does Clean Energy Fuels' (NASDAQ:CLNE) CEO Salary Compare Well With The Performance Of The Company?

Simply Wall St

Andrew Littlefair has been the CEO of Clean Energy Fuels Corp. (NASDAQ:CLNE) since 2001, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Clean Energy Fuels

Comparing Clean Energy Fuels Corp.'s CEO Compensation With the industry

According to our data, Clean Energy Fuels Corp. has a market capitalization of US$588m, and paid its CEO total annual compensation worth US$1.6m over the year to December 2019. That's a notable decrease of 16% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$701k.

In comparison with other companies in the industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$3.7m. Accordingly, Clean Energy Fuels pays its CEO under the industry median. Furthermore, Andrew Littlefair directly owns US$4.4m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2019

2018

Proportion (2019)

Salary

US$701k

US$701k

43%

Other

US$944k

US$1.3m

57%

Total Compensation

US$1.6m

US$2.0m

100%

On an industry level, roughly 19% of total compensation represents salary and 81% is other remuneration. Clean Energy Fuels 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

Clean Energy Fuels Corp.'s Growth

Clean Energy Fuels Corp. has reduced its earnings per share by 6.1% a year over the last three years. In the last year, its revenue is up 5.1%.

The decline in earnings is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Clean Energy Fuels Corp. Been A Good Investment?

Clean Energy Fuels Corp. has served shareholders reasonably well, with a total return of 26% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

As we noted earlier, Clean Energy Fuels pays its CEO lower than the norm for similar-sized companies belonging to the same industry. While we have not been overly impressed by shareholder returns, earnings growth has been negative over the last three years, a real headache for the company. So, although we can't say CEO compensation is very high, shareholders might want to see an improvement in overall performance before agreeing that Andrew deserves a bump.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Clean Energy Fuels you should be aware of, and 1 of them doesn't sit too well with us.

Switching gears from Clean Energy Fuels, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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.