U.S. markets closed
  • S&P 500

    4,166.45
    -55.41 (-1.31%)
     
  • Dow 30

    33,290.08
    -533.37 (-1.58%)
     
  • Nasdaq

    14,030.38
    -130.97 (-0.92%)
     
  • Russell 2000

    2,237.75
    -49.71 (-2.17%)
     
  • Crude Oil

    71.50
    +0.46 (+0.65%)
     
  • Gold

    1,763.90
    -10.90 (-0.61%)
     
  • Silver

    25.84
    -0.01 (-0.04%)
     
  • EUR/USD

    1.1865
    -0.0045 (-0.38%)
     
  • 10-Yr Bond

    1.4500
    -0.0610 (-4.04%)
     
  • GBP/USD

    1.3809
    -0.0115 (-0.83%)
     
  • USD/JPY

    110.1500
    -0.0810 (-0.07%)
     
  • BTC-USD

    35,894.45
    -933.20 (-2.53%)
     
  • CMC Crypto 200

    888.52
    -51.42 (-5.47%)
     
  • FTSE 100

    7,017.47
    -135.96 (-1.90%)
     
  • Nikkei 225

    28,964.08
    -54.25 (-0.19%)
     

Most Shareholders Will Probably Agree With Duke Energy Corporation's (NYSE:DUK) CEO Compensation

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Duke Energy Corporation (NYSE:DUK) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 06 May 2021. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

See our latest analysis for Duke Energy

Comparing Duke Energy Corporation's CEO Compensation With the industry

Our data indicates that Duke Energy Corporation has a market capitalization of US$76b, and total annual CEO compensation was reported as US$15m for the year to December 2020. That's slightly lower by 3.2% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.4m.

For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$15m. This suggests that Duke Energy remunerates its CEO largely in line with the industry average. Furthermore, Lynn Good directly owns US$31m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2020

2019

Proportion (2020)

Salary

US$1.4m

US$1.4m

10%

Other

US$13m

US$14m

90%

Total Compensation

US$15m

US$15m

100%

Talking in terms of the industry, salary represented approximately 12% of total compensation out of all the companies we analyzed, while other remuneration made up 88% of the pie. In Duke Energy's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. 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 Duke Energy Corporation's Growth Numbers

Over the last three years, Duke Energy Corporation has shrunk its earnings per share by 27% per year. It saw its revenue drop 4.9% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Duke Energy Corporation Been A Good Investment?

Boasting a total shareholder return of 40% over three years, Duke Energy Corporation 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.

To Conclude...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 6 warning signs for Duke Energy (1 shouldn't be ignored!) that you should be aware of before investing here.

Switching gears from Duke Energy, 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 (at) simplywallst.com.