Connie Lau has been the CEO of Hawaiian Electric Industries, Inc. (NYSE:HE) since 2006. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
How Does Connie Lau's Compensation Compare With Similar Sized Companies?
Our data indicates that Hawaiian Electric Industries, Inc. is worth US$4.5b, and total annual CEO compensation is US$5.7m. (This figure is for the year to December 2018). That's below the compensation, last year. We think total compensation is more important but we note that the CEO salary is lower, at US$922k. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.2m.
So Connie Lau receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Hawaiian Electric Industries has changed from year to year.
Is Hawaiian Electric Industries, Inc. Growing?
Over the last three years Hawaiian Electric Industries, Inc. has shrunk its earnings per share by an average of 3.1% per year (measured with a line of best fit). Its revenue is up 10% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has Hawaiian Electric Industries, Inc. Been A Good Investment?
I think that the total shareholder return of 45%, over three years, would leave most Hawaiian Electric Industries, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Connie Lau is paid around the same as most CEOs of similar size companies.
We're not seeing great strides in earnings per share, but the company has clearly pleased some investors, given the returns over the last three years. So we can't see a reason to suggest the pay is inappropriate. Shareholders may want to check for free if Hawaiian Electric Industries insiders are buying or selling shares.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.