How Should Investors Feel About Xcel Energy Inc.’s (NASDAQ:XEL) CEO Pay?
Ben Fowke became the CEO of Xcel Energy Inc. (NASDAQ:XEL) in 2011. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Xcel Energy
How Does Ben Fowke’s Compensation Compare With Similar Sized Companies?
Our data indicates that Xcel Energy Inc. is worth US$25b, and total annual CEO compensation is US$13m. (This is based on the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.3m. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO compensation was US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.
So Ben Fowke receives a similar amount to the median CEO pay, amongst the companies we looked at. 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 Xcel Energy has changed from year to year.
Is Xcel Energy Inc. Growing?
On average over the last three years, Xcel Energy Inc. has grown earnings per share (EPS) by 7.3% each year. The trailing twelve months of revenue was pretty much the same as the prior period.
I would argue that the improvement in revenue isn’t particularly impressive, but it is good to see modest EPS growth. It’s clear the performance has been quite decent, but it it falls short of outstanding,based on this information.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Xcel Energy Inc. Been A Good Investment?
Most shareholders would probably be pleased with Xcel Energy Inc. for providing a total return of 48% over three years. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
In Summary…
Ben Fowke is paid around what is normal the leaders of larger companies.
While the growth could be better, the shareholder returns are clearly good. So all things considered I’d venture that the CEO pay is appropriate. So you may want to check if insiders are buying Xcel Energy shares with their own money (free access).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
