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Public Service Enterprise Group Incorporated's (NYSE:PEG) CEO Compensation Is Looking A Bit Stretched At The Moment

·4 min read

Performance at Public Service Enterprise Group Incorporated (NYSE:PEG) has been reasonably good and CEO Ralph Izzo has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 20 April 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Public Service Enterprise Group

How Does Total Compensation For Ralph Izzo Compare With Other Companies In The Industry?

Our data indicates that Public Service Enterprise Group Incorporated has a market capitalization of US$31b, and total annual CEO compensation was reported as US$14m for the year to December 2020. We note that's an increase of 9.4% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.4m.

For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$10m. Accordingly, our analysis reveals that Public Service Enterprise Group Incorporated pays Ralph Izzo north of the industry median. Furthermore, Ralph Izzo directly owns US$29m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2020

2019

Proportion (2020)

Salary

US$1.4m

US$1.4m

10%

Other

US$13m

US$12m

90%

Total Compensation

US$14m

US$13m

100%

Talking in terms of the industry, salary represented approximately 13% of total compensation out of all the companies we analyzed, while other remuneration made up 87% of the pie. Public Service Enterprise Group pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

Public Service Enterprise Group Incorporated's Growth

Over the past three years, Public Service Enterprise Group Incorporated has seen its earnings per share (EPS) grow by 6.6% per year. In the last year, its revenue is down 4.7%.

We would prefer it if there was revenue growth, but the modest EPS growth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Public Service Enterprise Group Incorporated Been A Good Investment?

We think that the total shareholder return of 36%, over three years, would leave most Public Service Enterprise Group Incorporated shareholders smiling. 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.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Public Service Enterprise Group that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.