Mike Garland has been the CEO of Pattern Energy Group Inc. (NASDAQ:PEGI) since 2012. First, this article will compare CEO compensation with compensation at similar sized 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 process should give us an idea about how appropriately the CEO is paid.
How Does Mike Garland’s Compensation Compare With Similar Sized Companies?
According to our data, Pattern Energy Group Inc. has a market capitalization of US$2.3b, and pays its CEO total annual compensation worth US$2.1m. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$453k. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO total compensation was US$4.0m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Pattern Energy Group has changed over time.
Is Pattern Energy Group Inc. Growing?
On average over the last three years, Pattern Energy Group Inc. has grown earnings per share (EPS) by 90% each year (using a line of best fit). It achieved revenue growth of 18% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business.
Has Pattern Energy Group Inc. Been A Good Investment?
Pattern Energy Group Inc. has generated a total shareholder return of 26% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
Pattern Energy Group Inc. is currently paying its CEO below what is normal for companies of its size. Since the business is growing, many would argue this suggests the pay is modest. While returns over the last few years haven’t been top notch, there is nothing to suggest to us that Mike Garland is overcompensated.
It’s great to see a company that pays its CEO reasonably, even while growing. But for me, it’s even better if insiders are also buying shares with their own cold, hard, cash. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Pattern Energy Group (free visualization of insider trades).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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.