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Does Unitil's (NYSE:UTL) CEO Salary Compare Well With The Performance Of The Company?

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·4 min read
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Tom Meissner became the CEO of Unitil Corporation (NYSE:UTL) in 2018, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Unitil

How Does Total Compensation For Tom Meissner Compare With Other Companies In The Industry?

According to our data, Unitil Corporation has a market capitalization of US$642m, and paid its CEO total annual compensation worth US$3.6m over the year to December 2019. Notably, that's an increase of 47% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$572k.

On examining similar-sized companies in the industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$1.3m. This suggests that Tom Meissner is paid more than the median for the industry. Furthermore, Tom Meissner directly owns US$2.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2019

2018

Proportion (2019)

Salary

US$572k

US$488k

16%

Other

US$3.0m

US$2.0m

84%

Total Compensation

US$3.6m

US$2.4m

100%

Speaking on an industry level, nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. Our data reveals that Unitil allocates salary more or less in line with the wider market. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

A Look at Unitil Corporation's Growth Numbers

Unitil Corporation saw earnings per share stay pretty flat over the last three years. It saw its revenue drop 6.5% over the last year.

We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. It's hard to reach a conclusion about business performance right now. This may be one to watch. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Unitil Corporation Been A Good Investment?

Given the total shareholder loss of 5.9% over three years, many shareholders in Unitil Corporation are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we noted earlier, Unitil pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been downright disappointing for Unitil, and although EPS growth is steady, it hasn't set the world on fire. This doesn't look great when you consider Tom is taking home compensation north of the industry average. With such poor returns, we would understand if shareholders had concerns related to the CEO's pay.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Unitil that investors should think about before committing capital to this stock.

Switching gears from Unitil, 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.