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In 2008 Bob Rowe was appointed CEO of NorthWestern Corporation (NYSE:NWE). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Bob Rowe's Compensation Compare With Similar Sized Companies?
According to our data, NorthWestern Corporation has a market capitalization of US$3.5b, and pays its CEO total annual compensation worth US$3.2m. (This number is for the twelve months until December 2018). Notably, that's an increase of 11% over the year before. While we always look at total compensation first, we note that the salary component is less, at US$625k. 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$4.9m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at NorthWestern has changed over time.
Is NorthWestern Corporation Growing?
Over the last three years NorthWestern Corporation has grown its earnings per share (EPS) by an average of 6.6% per year (using a line of best fit). Its revenue is down -8.7% over last year.
I would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. You might want to check this free visual report on analyst forecasts for future earnings.
Has NorthWestern Corporation Been A Good Investment?
NorthWestern Corporation has served shareholders reasonably well, with a total return of 26% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
NorthWestern Corporation is currently paying its CEO below what is normal for companies of its size.
Bob Rowe receives relatively low remuneration compared to similar sized companies. But the company isn't exactly firing on all cylinders, from my perspective. But on this analysis I see no issue with the CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling NorthWestern (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.