Is NRG Energy, Inc.’s (NYSE:NRG) CEO Overpaid Relative To Its Peers?

Mauricio Gutierrez has been the CEO of NRG Energy, Inc. (NYSE:NRG) since 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for NRG Energy

How Does Mauricio Gutierrez’s Compensation Compare With Similar Sized Companies?

Our data indicates that NRG Energy, Inc. is worth US$9.3b, and total annual CEO compensation is US$8.9m. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$1.2m. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.9m.

So Mauricio Gutierrez receives a similar amount to the median CEO pay, amongst the companies we looked at. 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.

NYSE:NRG CEO Compensation, July 26th 2019
NYSE:NRG CEO Compensation, July 26th 2019

Is NRG Energy, Inc. Growing?

Over the last three years NRG Energy, Inc. has grown its earnings per share (EPS) by an average of 101% per year (using a line of best fit). In the last year, its revenue is up 9.4%.

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.

Has NRG Energy, Inc. Been A Good Investment?

I think that the total shareholder return of 151%, over three years, would leave most NRG Energy, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

Remuneration for Mauricio Gutierrez is close enough to the median pay for a CEO of a similar sized company .

The company is growing earnings per share and total shareholder returns have been pleasing. Indeed, many might consider the pay rather modest, given the solid company performance! Shareholders may want to check for free if NRG Energy insiders are buying or selling shares.

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.