Yahoo Finance Here's Why It's Unlikely That Eversource Energy's (NYSE:ES) CEO Will See A Pay Rise This Year
Key Insights
Eversource Energy to hold its Annual General Meeting on 1st of May
Salary of US$1.33m is part of CEO Joe Nolan's total remuneration
The total compensation is 39% higher than the average for the industry
Eversource Energy's EPS declined by 18% over the past three years while total shareholder loss over the past three years was 21%
Eversource Energy (NYSE:ES) has not performed well recently and CEO Joe Nolan will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 1st of May. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.
Check out our latest analysis for Eversource Energy
Comparing Eversource Energy's CEO Compensation With The Industry
At the time of writing, our data shows that Eversource Energy has a market capitalization of US$21b, and reported total annual CEO compensation of US$19m for the year to December 2023. That's a notable increase of 46% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.3m.
In comparison with other companies in the American Electric Utilities industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$14m. Accordingly, our analysis reveals that Eversource Energy pays Joe Nolan north of the industry median. What's more, Joe Nolan holds US$3.8m worth of shares in the company in their own name.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.3m | US$1.3m | 7% |
Other | US$18m | US$12m | 93% |
Total Compensation | US$19m | US$13m | 100% |
On an industry level, roughly 11% of total compensation represents salary and 89% is other remuneration. It's interesting to note that Eversource Energy allocates a smaller portion of compensation to salary in comparison 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.
A Look at Eversource Energy's Growth Numbers
Over the last three years, Eversource Energy has shrunk its earnings per share by 18% per year. It saw its revenue drop 3.1% over the last year.
Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Eversource Energy Been A Good Investment?
Given the total shareholder loss of 21% over three years, many shareholders in Eversource Energy are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Eversource Energy that you should be aware of before investing.
Important note: Eversource Energy is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
