Is NiSource Inc. (NYSE:NI) Excessively Paying Its CEO?
Joe Hamrock has been the CEO of NiSource Inc. (NYSE:NI) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for NiSource
How Does Joe Hamrock's Compensation Compare With Similar Sized Companies?
According to our data, NiSource Inc. has a market capitalization of US$10b, and paid its CEO total annual compensation worth US$5.8m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$990k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
This would give shareholders a good impression of the company, since most large companies 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 NiSource has changed over time.
Is NiSource Inc. Growing?
Over the last three years NiSource Inc. has shrunk its earnings per share by an average of 40% per year (measured with a line of best fit). In the last year, its revenue is up 5.0%.
Few shareholders would be pleased to read that earnings per share are lower over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. 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 NiSource Inc. Been A Good Investment?
Most shareholders would probably be pleased with NiSource Inc. for providing a total return of 38% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
It looks like NiSource Inc. pays its CEO less than the average at large companies.
It's well worth noting that while Joe Hamrock is paid less than most company leaders (at larger companies), there isn't much EPS growth. Having said that, returns to shareholders have been great. We would like to see EPS growth, but in our view it seems the CEO is remunerated reasonably. Whatever your view on compensation, you might want to check if insiders are buying or selling NiSource shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.
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