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Is Eversource Energy's (NYSE:ES) CEO Being Overpaid?

Simply Wall St

Jim Judge has been the CEO of Eversource Energy (NYSE:ES) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big 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. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Eversource Energy

How Does Jim Judge's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Eversource Energy has a market cap of US$22b, and is paying total annual CEO compensation of US$15m. (This figure is for the year to December 2018). That's below the compensation, last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.3m. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be 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).

As you can see, Jim Judge is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean Eversource Energy is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Eversource Energy, below.

NYSE:ES CEO Compensation, April 23rd 2019

Is Eversource Energy Growing?

Over the last three years Eversource Energy has grown its earnings per share (EPS) by an average of 6.4% per year (using a line of best fit). Its revenue is up 9.0% over last year.

I'd prefer higher revenue growth, but I'm happy with the modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Shareholders might be interested in this free visualization of analyst forecasts.

Has Eversource Energy Been A Good Investment?

Most shareholders would probably be pleased with Eversource Energy for providing a total return of 39% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

We compared the total CEO remuneration paid by Eversource Energy, and compared it to remuneration at a group of 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. Considering this fine result for investors, we daresay the CEO compensation might be apt. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Eversource Energy.

Important note: Eversource Energy may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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.