Does UGI Corporation's (NYSE:UGI) CEO Salary Compare Well With Others?
John Walsh has been the CEO of UGI Corporation (NYSE:UGI) since 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. 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 UGI
How Does John Walsh's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that UGI Corporation has a market cap of US$6.3b, and reported total annual CEO compensation of US$8.6m for the year to September 2019. We think total compensation is more important but we note that the CEO salary is lower, at US$1.2m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$7.5m.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On a sector level, around 17% of total compensation represents salary and 83% is other remuneration. So it seems like there isn't a significant difference between UGI and the broader market, in terms of salary allocation in the overall compensation package.
That means John Walsh receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance. The graphic below shows how CEO compensation at UGI has changed from year to year.
Is UGI Corporation Growing?
UGI Corporation has reduced its earnings per share by an average of 11% a year, over the last three years (measured with a line of best fit). Its revenue is down 7.8% over last year.
Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has UGI Corporation Been A Good Investment?
Given the total loss of 34% over three years, many shareholders in UGI Corporation are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
Remuneration for John Walsh is close enough to the median pay for a CEO of a similar sized company .
The company isn't growing EPS, and shareholder returns have been disappointing. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. CEO compensation is an important area to keep your eyes on, but we've also identified 3 warning signs for UGI (1 is significant!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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