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Is ONE Gas, Inc.'s (NYSE:OGS) CEO Overpaid Relative To Its Peers?

Simply Wall St

Pierce Norton has been the CEO of ONE Gas, Inc. (NYSE:OGS) since 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. 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.

Check out our latest analysis for ONE Gas

How Does Pierce Norton's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that ONE Gas, Inc. has a market cap of US$5.0b, and reported total annual CEO compensation of US$4.2m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$775k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.8m.

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.

The graphic below shows how CEO compensation at ONE Gas has changed from year to year.

NYSE:OGS CEO Compensation, October 21st 2019

Is ONE Gas, Inc. Growing?

ONE Gas, Inc. has increased its earnings per share (EPS) by an average of 9.9% a year, over the last three years (using a line of best fit). Revenue was pretty flat on last year.

I'm not particularly impressed by the revenue growth, but I'm happy with the modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. It could be important to check this free visual depiction of what analysts expect for the future.

Has ONE Gas, Inc. Been A Good Investment?

Boasting a total shareholder return of 69% over three years, ONE Gas, Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

ONE Gas, Inc. is currently paying its CEO below what is normal for companies of its size.

Pierce Norton is paid less than what is normal at similar size companies, and the total shareholder return has been pleasing over the last three years. So, while it might be nice to have better EPS growth, on our analysis the CEO compensation is quite modest. So you may want to check if insiders are buying ONE Gas shares with their own money (free access).

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.

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 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. Thank you for reading.