John Hester has been the CEO of Southwest Gas Holdings, Inc. (NYSE:SWX) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does John Hester's Compensation Compare With Similar Sized Companies?
According to our data, Southwest Gas Holdings, Inc. has a market capitalization of US$4.9b, and paid its CEO total annual compensation worth US$4.1m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$858k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$4.0b to US$12b, and the median CEO total compensation was US$6.8m.
Most shareholders would consider it a positive that John Hester takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at Southwest Gas Holdings, below.
Is Southwest Gas Holdings, Inc. Growing?
Over the last three years Southwest Gas Holdings, Inc. has grown its earnings per share (EPS) by an average of 9.8% per year (using a line of best fit). It achieved revenue growth of 8.8% over the last year.
I'd prefer higher revenue growth, but it is good to see modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Shareholders might be interested in this free visualization of analyst forecasts.
Has Southwest Gas Holdings, Inc. Been A Good Investment?
Boasting a total shareholder return of 44% over three years, Southwest Gas Holdings, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
It looks like Southwest Gas Holdings, Inc. pays its CEO less than similar sized companies.
John Hester receives relatively low remuneration compared to similar sized companies. And the returns to shareholders were great, over the last few years. Although we could see higher growth, we'd argue the remuneration is modest, based on these observations. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Southwest Gas Holdings.
Important note: Southwest Gas Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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