Nick Akins became the CEO of American Electric Power Company, Inc. (NYSE:AEP) in 2011. 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 process should give us an idea about how appropriately the CEO is paid.
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How Does Nick Akins’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that American Electric Power Company, Inc. has a market cap of US$42b, and is paying total annual CEO compensation of US$12m. (This number is for the twelve months until December 2018). That’s a fairly small increase of 5.8% on year before. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.4m. We looked at a group of companies with market capitalizations over US$8.0b and the 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 Nick Akins receives fairly typical remuneration for the CEO of a large company. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at American Electric Power Company, below.
Is American Electric Power Company, Inc. Growing?
American Electric Power Company, Inc. has increased its earnings per share (EPS) by an average of 25% a year, over the last three years (using a line of best fit). It achieved revenue growth of 4.3% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. It could be important to check this free visual depiction of what analysts expect for the future.
Has American Electric Power Company, Inc. Been A Good Investment?
I think that the total shareholder return of 48%, over three years, would leave most American Electric Power Company, 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.
Remuneration for Nick Akins is close enough to the median pay for a CEO of a large 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! So you may want to check if insiders are buying American Electric Power Company shares with their own money (free access).
If you want to buy a stock that is better than American Electric Power Company, this free list of high return, low debt companies is a great place to look.
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.