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Under the guidance of CEO Robert Trauschke, OGE Energy Corp. (NYSE:OGE) has performed reasonably well recently. As shareholders go into the upcoming AGM on 20 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 OGE Energy Corp.'s CEO Compensation With the industry
At the time of writing, our data shows that OGE Energy Corp. has a market capitalization of US$6.6b, and reported total annual CEO compensation of US$5.4m for the year to December 2020. That's a notable decrease of 16% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.
On comparing similar companies from the same industry with market caps ranging from US$4.0b to US$12b, we found that the median CEO total compensation was US$5.9m. This suggests that OGE Energy remunerates its CEO largely in line with the industry average. Moreover, Robert Trauschke also holds US$11m worth of OGE Energy stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
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. According to our research, OGE Energy has allocated a higher percentage of pay to salary in comparison to the wider industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
OGE Energy Corp.'s Growth
Over the last three years, OGE Energy Corp. has shrunk its earnings per share by 17% per year. Its revenue is up 53% over the last year.
The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 OGE Energy Corp. Been A Good Investment?
OGE Energy Corp. has generated a total shareholder return of 15% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
Although the company has performed relatively well, we still think there are some areas that could be improved. We reckon that there are some shareholders who may be hesitant to increase CEO pay further until EPS growth starts to improve, despite the robust revenue growth.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for OGE Energy you should be aware of, and 1 of them makes us a bit uncomfortable.
Important note: OGE Energy 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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