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Is Pattern Energy Group Inc. (NASDAQ:PEGI) Excessively Paying Its CEO?

Simply Wall St

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Mike Garland became the CEO of Pattern Energy Group Inc. (NASDAQ:PEGI) in 2012. First, this article will compare CEO compensation with compensation at similar sized companies. 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.

Check out our latest analysis for Pattern Energy Group

How Does Mike Garland's Compensation Compare With Similar Sized Companies?

According to our data, Pattern Energy Group Inc. has a market capitalization of US$2.3b, and pays its CEO total annual compensation worth US$2.1m. (This figure is for the year to December 2018). We note that's an increase of 11% above last year. We think total compensation is more important but we note that the CEO salary is lower, at US$453k. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO total compensation was US$4.1m.

Most shareholders would consider it a positive that Mike Garland takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

You can see, below, how CEO compensation at Pattern Energy Group has changed over time.

NasdaqGS:PEGI CEO Compensation, June 24th 2019

Is Pattern Energy Group Inc. Growing?

On average over the last three years, Pattern Energy Group Inc. has grown earnings per share (EPS) by 90% each year (using a line of best fit). Its revenue is up 18% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Pattern Energy Group Inc. Been A Good Investment?

Most shareholders would probably be pleased with Pattern Energy Group Inc. for providing a total return of 40% over three years. 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...

It appears that Pattern Energy Group Inc. remunerates its CEO below most similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that Mike Garland deserves a raise!

It is relatively rare to see a modestly paid CEO when performance is so impressive. But it is even better if company insiders are also buying shares with their own money. So you may want to check if insiders are buying Pattern Energy Group shares with their own money (free access).

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 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.