MGE Energy, Inc.'s (NASDAQ:MGEE) CEO Compensation Looks Acceptable To Us And Here's Why

Shareholders may be wondering what CEO Jeff Keebler plans to do to improve the less than great performance at MGE Energy, Inc. (NASDAQ:MGEE) recently. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 18 May 2021. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We think CEO compensation looks appropriate given the data we have put together.

See our latest analysis for MGE Energy

How Does Total Compensation For Jeff Keebler Compare With Other Companies In The Industry?

Our data indicates that MGE Energy, Inc. has a market capitalization of US$2.7b, and total annual CEO compensation was reported as US$2.7m for the year to December 2020. Notably, that's an increase of 14% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$620k.

On comparing similar companies from the same industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$5.1m. In other words, MGE Energy pays its CEO lower than the industry median. Furthermore, Jeff Keebler directly owns US$174k worth of shares in the company.

Component	2020	2019	Proportion (2020)
Salary	US$620k	US$592k	23%
Other	US$2.1m	US$1.8m	77%
Total Compensation	US$2.7m	US$2.4m	100%

On an industry level, roughly 12% of total compensation represents salary and 88% is other remuneration. According to our research, MGE Energy has allocated a higher percentage of pay to salary in comparison to the wider industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

MGE Energy, Inc.'s Growth

Over the last three years, MGE Energy, Inc. has not seen its earnings per share change much, though they have deteriorated slightly. Revenue was pretty flat on last year.

Its a bit disappointing to see that the company has failed to grow its EPS. And the flat revenue hardly impresses. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has MGE Energy, Inc. Been A Good Investment?

We think that the total shareholder return of 38%, over three years, would leave most MGE Energy, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean these strong returns may not continue. These concerns could be addressed to the board and shareholders should revisit their investment thesis to see if it still makes sense.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for MGE Energy that you should be aware of before investing.

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.

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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. 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.
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