Here's Why Shareholders May Want To Be Cautious With Increasing Unitil Corporation's (NYSE:UTL) CEO Pay Packet
Performance at Unitil Corporation (NYSE:UTL) has been reasonably good and CEO Tom Meissner has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 28 April 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.
View our latest analysis for Unitil
Comparing Unitil Corporation's CEO Compensation With the industry
At the time of writing, our data shows that Unitil Corporation has a market capitalization of US$752m, and reported total annual CEO compensation of US$4.0m for the year to December 2020. We note that's an increase of 11% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$598k.
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. What's more, Tom Meissner holds US$3.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$598k | US$572k | 15% |
Other | US$3.4m | US$3.0m | 85% |
Total Compensation | US$4.0m | US$3.6m | 100% |
On an industry level, around 13% of total compensation represents salary and 87% is other remuneration. Unitil is paying a higher share of its remuneration through a salary in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Unitil Corporation's Growth
Unitil Corporation has seen its earnings per share (EPS) increase by 1.5% a year over the past three years. It saw its revenue drop 4.4% over the last year.
We would prefer it if there was 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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Unitil Corporation Been A Good Investment?
Unitil Corporation has generated a total shareholder return of 20% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
To Conclude...
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. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 2 warning signs for Unitil (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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