This article will reflect on the compensation paid to Connie Lau who has served as CEO of Hawaiian Electric Industries, Inc. (NYSE:HE) since 2006. This analysis will also assess whether Hawaiian Electric Industries pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Hawaiian Electric Industries, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that Hawaiian Electric Industries, Inc. has a market capitalization of US$4.1b, and reported total annual CEO compensation of US$4.9m for the year to December 2019. Notably, that's a decrease of 14% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$926k.
For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$3.9m. From this we gather that Connie Lau is paid around the median for CEOs in the industry. What's more, Connie Lau holds US$23m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 13% of total compensation represents salary, while the remainder of 87% is other remuneration. Hawaiian Electric Industries is paying a higher share of its remuneration through a salary in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Hawaiian Electric Industries, Inc.'s Growth
Hawaiian Electric Industries, Inc. has seen its earnings per share (EPS) increase by 6.2% a year over the past three years. It saw its revenue drop 8.8% over the last year.
We would prefer it if there was revenue growth, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Hawaiian Electric Industries, Inc. Been A Good Investment?
Hawaiian Electric Industries, Inc. has generated a total shareholder return of 13% over three years, so most shareholders would 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 noted earlier, Hawaiian Electric Industries pays its CEO in line with similar-sized companies belonging to the same industry. But the company has failed to produce substantial growth in either EPS or total shareholder return. We'd say that Connie is remunerated reasonably, but shareholders might be looking for better returns before they agree Connie deserves a raise.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Hawaiian Electric Industries that investors should look into moving forward.
Switching gears from Hawaiian Electric Industries, 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.
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