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Dennis Doll has been the CEO of Middlesex Water Company (NASDAQ:MSEX) since 2006. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Dennis Doll’s Compensation Compare With Similar Sized Companies?
Our data indicates that Middlesex Water Company is worth US$973m, and total annual CEO compensation is US$1.4m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$588k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.7m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it’s important we delve into the performance of the actual business.
The graphic below shows how CEO compensation at Middlesex Water has changed from year to year.
Is Middlesex Water Company Growing?
On average over the last three years, Middlesex Water Company has grown earnings per share (EPS) by 15% each year (using a line of best fit). In the last year, its revenue is up 4.4%.
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 Middlesex Water Company Been A Good Investment?
Most shareholders would probably be pleased with Middlesex Water Company for providing a total return of 52% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Middlesex Water Company is currently paying its CEO below what is normal for companies of its size. Considering the underlying business is growing earnings, this would suggest the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that Dennis Doll deserves a raise!
It is relatively rare to see a modestly paid CEO when performance is so impressive. It would be even more positive if company insiders are buying shares. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Middlesex Water (free visualization of insider trades).
Important note: Middlesex Water 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.