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Leo Denault has been the CEO of Entergy Corporation (NYSE:ETR) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Entergy.
Comparing Entergy Corporation's CEO Compensation With the industry
According to our data, Entergy Corporation has a market capitalization of US$19b, and paid its CEO total annual compensation worth US$14m over the year to December 2019. Notably, that's an increase of 38% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.3m.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$13m. This suggests that Entergy remunerates its CEO largely in line with the industry average. Furthermore, Leo Denault directly owns US$25m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, roughly 13% of total compensation represents salary and 87% is other remuneration. It's interesting to note that Entergy 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.
Entergy Corporation's Growth
Entergy Corporation's earnings per share (EPS) grew 59% per year over the last three years. Its revenue is down 6.6% over the previous year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Entergy Corporation Been A Good Investment?
With a total shareholder return of 32% over three years, Entergy Corporation shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
As we touched on above, Entergy Corporation is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But EPS growth for the company has been strong over the last three years, though shareholder returns in comparison haven't been as impressive. As a result of these considerations, we would suggest the compensation is reasonable, but looking ahead shareholders will likely want to see healthier returns.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Entergy that investors should be aware of in a dynamic business environment.
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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