John McAvoy became the CEO of Consolidated Edison, Inc. (NYSE:ED) in 2013. This analysis aims first to contrast CEO compensation with other large companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does John McAvoy's Compensation Compare With Similar Sized Companies?
According to our data, Consolidated Edison, Inc. has a market capitalization of US$30b, and paid its CEO total annual compensation worth US$9.8m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.3m. 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 John McAvoy receives a similar amount to the median CEO pay, amongst 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.
You can see a visual representation of the CEO compensation at Consolidated Edison, below.
Is Consolidated Edison, Inc. Growing?
Over the last three years Consolidated Edison, Inc. has grown its earnings per share (EPS) by an average of 4.7% per year (using a line of best fit). In the last year, its revenue is up 2.5%.
I'd prefer higher revenue growth, but it is good to see modest EPS growth. Considering these factors I'd say performance has been pretty decent, though not amazing. You might want to check this free visual report on analyst forecasts for future earnings.
Has Consolidated Edison, Inc. Been A Good Investment?
Boasting a total shareholder return of 38% over three years, Consolidated Edison, Inc. has done well by shareholders. 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.
John McAvoy is paid around what is normal the leaders of larger companies.
While the growth could be better, the shareholder returns are clearly good. So all things considered I'd venture that 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 Consolidated Edison.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.