In 2016 Jim Judge was appointed CEO of Eversource Energy (NYSE:ES). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big 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.
How Does Jim Judge's Compensation Compare With Similar Sized Companies?
According to our data, Eversource Energy has a market capitalization of US$27b, and paid its CEO total annual compensation worth US$15m 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. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
It would therefore appear that Eversource Energy pays Jim Judge more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Eversource Energy has changed over time.
Is Eversource Energy Growing?
Earnings per share at Eversource Energy are much the same as they were three years ago, albeit with a positive trend. In the last year, its revenue is up 2.4%.
I would argue that the improvement in revenue isn't particularly impressive, but I'm happy with the modest EPS growth. Considering these factors I'd say performance has been pretty decent, though not amazing. It could be important to check this free visual depiction of what analysts expect for the future.
Has Eversource Energy Been A Good Investment?
Boasting a total shareholder return of 64% over three years, Eversource Energy 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.
We examined the amount Eversource Energy pays its CEO, and compared it to the amount paid by other large companies. As discussed above, we discovered that the company pays more than the median of that group.
Over the last three years returns to investors have been great, though we might have liked stronger business growth. So, considering these tasty returns, the CEO compensation may be quite appropriate. Shareholders may want to check for free if Eversource Energy insiders are buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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