U.S. Markets close in 4 hrs 1 min

Here’s What We Think About NextEra Energy, Inc.’s (NYSE:NEE) CEO Pay

Hector Vargas

Jim Robo has been the CEO of NextEra Energy, Inc. (NYSE:NEE) since 2012. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for NextEra Energy

How Does Jim Robo’s Compensation Compare With Similar Sized Companies?

According to our data, NextEra Energy, Inc. has a market capitalization of US$82b, and pays its CEO total annual compensation worth US$19m. (This is based on the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.4m. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO compensation was US$11m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

It would therefore appear that NextEra Energy, Inc. pays Jim Robo more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

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

NYSE:NEE CEO Compensation January 10th 19

Is NextEra Energy, Inc. Growing?

Over the last three years NextEra Energy, Inc. has grown its earnings per share (EPS) by an average of 44% per year (using a line of best fit). In the last year, its revenue is down -3.1%.

This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business.

It could be important to check this free visual depiction of what analysts expect for the future.

Has NextEra Energy, Inc. Been A Good Investment?

Boasting a total shareholder return of 80% over three years, NextEra Energy, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

We compared the total CEO remuneration paid by NextEra Energy, Inc., and compared it to remuneration at a group of other large companies. Our data suggests that it pays above the median CEO pay within that group.

However, the earnings per share growth over three years is certainly impressive. On top of that, in the same period, returns to shareholders have been great. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Whatever your view on compensation, you might want to check if insiders are buying or selling NextEra Energy shares (free trial).

Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.