Does PNM Resources, Inc.'s (NYSE:PNM) CEO Pay Matter?
Pat Vincent-Collawn has been the CEO of PNM Resources, Inc. (NYSE:PNM) since 2010. First, this article will compare CEO compensation with compensation at similar sized 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.
See our latest analysis for PNM Resources
How Does Pat Vincent-Collawn's Compensation Compare With Similar Sized Companies?
According to our data, PNM Resources, Inc. has a market capitalization of US$4.1b, and pays its CEO total annual compensation worth US$4.8m. (This number is for the twelve months until December 2018). While we always look at total compensation first, we note that the salary component is less, at US$854k. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.1m.
So Pat Vincent-Collawn receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at PNM Resources, below.
Is PNM Resources, Inc. Growing?
PNM Resources, Inc. has reduced its earnings per share by an average of 6.1% a year, over the last three years (measured with a line of best fit). Its revenue is up 1.7% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. The modest increase in revenue in the last year isn't enough to make me 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. It could be important to check this free visual depiction of what analysts expect for the future.
Has PNM Resources, Inc. Been A Good Investment?
I think that the total shareholder return of 70%, over three years, would leave most PNM Resources, Inc. shareholders smiling. 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.
In Summary...
Pat Vincent-Collawn is paid around the same as most CEOs of similar size companies.
We feel that earnings per share have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So we can't see a reason to suggest the pay is inappropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling PNM Resources (free visualization of insider trades).
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 editorial-team@simplywallst.com. 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.
