Chris Sotos became the CEO of Clearway Energy, Inc. (NYSE:CWEN.A) in 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Chris Sotos's Compensation Compare With Similar Sized Companies?
According to our data, Clearway Energy, Inc. has a market capitalization of US$3.5b, and paid its CEO total annual compensation worth US$2.4m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$500k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.1m.
Most shareholders would consider it a positive that Chris Sotos takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.
The graphic below shows how CEO compensation at Clearway Energy has changed from year to year.
Is Clearway Energy, Inc. Growing?
Over the last three years Clearway Energy, Inc. has shrunk its earnings per share by an average of 64% per year (measured with a line of best fit). In the last year, its revenue changed by just 1.0%.
Sadly for shareholders, earnings per share are actually down, over three years. And the flat revenue hardly impresses. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Clearway Energy, Inc. Been A Good Investment?
Boasting a total shareholder return of 42% over three years, Clearway 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.
It looks like Clearway Energy, Inc. pays its CEO less than similar sized companies.
Chris Sotos is paid less than CEOs of similar size companies. While the company isn't growing on our analysis, shareholder returns have been good in recent years. We would like to see EPS growth, but in our view it seems the CEO is remunerated reasonably. Shareholders may want to check for free if Clearway Energy insiders are buying or selling shares.
Important note: Clearway Energy 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.
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 firstname.lastname@example.org. 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.