Is CenterPoint Energy, Inc. (NYSE:CNP) Excessively Paying Its CEO?

Scott Prochazka became the CEO of CenterPoint Energy, Inc. (NYSE:CNP) in 2014. This analysis aims first to contrast CEO compensation with other large 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. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for CenterPoint Energy

How Does Scott Prochazka's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that CenterPoint Energy, Inc. has a market cap of US$14b, and reported total annual CEO compensation of US$8.9m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$1.2m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. (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 Scott Prochazka receives fairly typical remuneration for the CEO of a large company. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance. It could be important to check this free visual depiction of what analysts expect for the future.

You can see, below, how CEO compensation at CenterPoint Energy has changed over time.

Is CenterPoint Energy, Inc. Growing?

On average over the last three years, CenterPoint Energy, Inc. has grown earnings per share (EPS) by 41% each year (using a line of best fit). In the last year, its revenue is up 15%.

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 CenterPoint Energy, Inc. Been A Good Investment?

Most shareholders would probably be pleased with CenterPoint Energy, Inc. for providing a total return of 42% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Scott Prochazka is paid around the same as most CEOs of large companies.

Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling CenterPoint Energy (free visualization of insider trades).

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.