Chuck Jones has been the CEO of FirstEnergy Corp. (NYSE:FE) since 2015. 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 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.
How Does Chuck Jones's Compensation Compare With Similar Sized Companies?
Our data indicates that FirstEnergy Corp. is worth US$26b, and total annual CEO compensation was reported as US$11m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.1m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. 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).
That means Chuck Jones receives fairly typical remuneration for the CEO of a large company. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at FirstEnergy has changed over time.
Is FirstEnergy Corp. Growing?
FirstEnergy Corp. has increased its earnings per share (EPS) by an average of 83% a year, over the last three years (using a line of best fit). Its revenue is down 4.1% over last year.
This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. Shareholders might be interested in this free visualization of analyst forecasts.
Has FirstEnergy Corp. Been A Good Investment?
I think that the total shareholder return of 77%, over three years, would leave most FirstEnergy Corp. 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.
Chuck Jones is paid around the same as most CEOs of large companies.
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. Shareholders may want to check for free if FirstEnergy insiders are buying or selling shares.
Important note: FirstEnergy may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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