Curt Morgan has been the CEO of Vistra Corp. (NYSE:VST) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Vistra Corp.'s CEO Compensation With the industry
At the time of writing, our data shows that Vistra Corp. has a market capitalization of US$9.5b, and reported total annual CEO compensation of US$9.7m for the year to December 2019. Notably, that's a decrease of 28% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.1m.
For comparison, other companies in the same industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$343k. Accordingly, our analysis reveals that Vistra Corp. pays Curt Morgan north of the industry median. Moreover, Curt Morgan also holds US$7.8m worth of Vistra stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 16% of total compensation represents salary and 84% is other remuneration. Vistra sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Vistra Corp.'s Growth Numbers
Over the last three years, Vistra Corp. has shrunk its earnings per share by 12% per year. It saw its revenue drop 1.2% over the last year.
The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Vistra Corp. Been A Good Investment?
Vistra Corp. has served shareholders reasonably well, with a total return of 13% over three years. 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, Vistra pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Meanwhile, EPS has not been growing sufficiently to impress us, over the last three years. While shareholder returns are acceptable, they don't delight. So we think more research is needed, but we don't think the CEO is underpaid.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 2 warning signs for Vistra you should be aware of, and 1 of them is a bit unpleasant.
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.
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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