Yahoo Finance Is NRG Energy, Inc.'s (NYSE:NRG) CEO Pay Justified?
In 2015 Mauricio Gutierrez was appointed CEO of NRG Energy, Inc. (NYSE:NRG). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
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See our latest analysis for NRG Energy
How Does Mauricio Gutierrez's Compensation Compare With Similar Sized Companies?
According to our data, NRG Energy, Inc. has a market capitalization of US$9.6b, and pays its CEO total annual compensation worth US$8.9m. (This number is for the twelve months until December 2018). That's less than last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.2m. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$12m. (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 Mauricio Gutierrez receives fairly typical remuneration for the CEO of a large company. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at NRG Energy has changed over time.
Is NRG Energy, Inc. Growing?
NRG Energy, Inc. has increased its earnings per share (EPS) by an average of 101% a year, over the last three years (using a line of best fit). Its revenue is up 9.4% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.
Has NRG Energy, Inc. Been A Good Investment?
I think that the total shareholder return of 136%, over three years, would leave most NRG Energy, Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
Remuneration for Mauricio Gutierrez is close enough to the median pay for a CEO of a large company .
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. So you may want to check if insiders are buying NRG Energy shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 editorial-team@simplywallst.com. 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.
