Most Shareholders Will Probably Find That The CEO Compensation For Sunrun Inc. (NASDAQ:RUN) Is Reasonable
CEO Lynn Jurich has done a decent job of delivering relatively good performance at Sunrun Inc. (NASDAQ:RUN) recently. 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 03 June 2021. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.
View our latest analysis for Sunrun
How Does Total Compensation For Lynn Jurich Compare With Other Companies In The Industry?
According to our data, Sunrun Inc. has a market capitalization of US$9.2b, and paid its CEO total annual compensation worth US$5.2m over the year to December 2020. That's a slight decrease of 4.2% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$678k.
For comparison, other companies in the same industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$6.4m. From this we gather that Lynn Jurich is paid around the median for CEOs in the industry. Moreover, Lynn Jurich also holds US$128m worth of Sunrun stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$678k | US$569k | 13% |
Other | US$4.5m | US$4.9m | 87% |
Total Compensation | US$5.2m | US$5.4m | 100% |
Talking in terms of the industry, salary represented approximately 29% of total compensation out of all the companies we analyzed, while other remuneration made up 71% of the pie. It's interesting to note that Sunrun allocates a smaller portion of compensation to salary 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.
Sunrun Inc.'s Growth
Sunrun Inc. has reduced its earnings per share by 125% a year over the last three years. In the last year, its revenue is up 20%.
The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Sunrun Inc. Been A Good Investment?
Boasting a total shareholder return of 274% over three years, Sunrun Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
Although the company has performed relatively well, we still think there are some areas that could be improved. Despite robust revenue growth, until EPS growth improves, shareholders may be hesitant to increase CEO pay by too much.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 5 warning signs (and 3 which are concerning) in Sunrun we think you should know about.
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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