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Under the guidance of CEO Connie Lau, Hawaiian Electric Industries, Inc. (NYSE:HE) has performed reasonably well recently. As shareholders go into the upcoming AGM on 07 May 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.
Comparing Hawaiian Electric Industries, Inc.'s CEO Compensation With the industry
According to our data, Hawaiian Electric Industries, Inc. has a market capitalization of US$4.7b, and paid its CEO total annual compensation worth US$5.1m over the year to December 2020. That's just a smallish increase of 4.2% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$950k.
For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$4.3m. This suggests that Hawaiian Electric Industries remunerates its CEO largely in line with the industry average. Moreover, Connie Lau also holds US$27m worth of Hawaiian Electric Industries stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Speaking on an industry level, nearly 12% of total compensation represents salary, while the remainder of 88% is other remuneration. According to our research, Hawaiian Electric Industries has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Hawaiian Electric Industries, Inc.'s Growth Numbers
Hawaiian Electric Industries, Inc. has seen its earnings per share (EPS) increase by 6.0% a year over the past three years. It saw its revenue drop 10% over the last year.
We generally like to see a little revenue growth, but the modest improvement in EPS is good. 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 Hawaiian Electric Industries, Inc. Been A Good Investment?
Boasting a total shareholder return of 36% over three years, Hawaiian Electric Industries, Inc. has done well by shareholders. 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.
Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Hawaiian Electric Industries that investors should think about before committing capital to this stock.
Important note: Hawaiian Electric Industries is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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.
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