Is Duke Energy Corporation’s (NYSE:DUK) CEO Paid Enough Relative To Peers?

Lynn Good has been the CEO of Duke Energy Corporation (NYSE:DUK) since 2013. First, this article will compare CEO compensation with compensation at other large companies. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Duke Energy

How Does Lynn Good’s Compensation Compare With Similar Sized Companies?

According to our data, Duke Energy Corporation has a market capitalization of US$63b, and pays its CEO total annual compensation worth US$14m. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.4m. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

So Lynn Good is paid around the average of the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.

The graphic below shows how CEO compensation at Duke Energy has changed from year to year.

NYSE:DUK CEO Compensation, July 25th 2019
NYSE:DUK CEO Compensation, July 25th 2019

Is Duke Energy Corporation Growing?

On average over the last three years, Duke Energy Corporation has grown earnings per share (EPS) by 4.3% each year (using a line of best fit). It achieved revenue growth of 1.9% over the last year.

I’d prefer higher revenue growth, but the modest improvement in EPS is good. Considering these factors I’d say performance has been pretty decent, though not amazing.

Has Duke Energy Corporation Been A Good Investment?

Duke Energy Corporation has generated a total shareholder return of 17% 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.

In Summary…

Lynn Good is paid around the same as most CEOs of large companies.

The company isn’t showing particularly great growth, and shareholder turns haven’t been particularly inspiring in the last few years. While there is room for improvement, we haven’t seen evidence to suggest the pay is too generous. Shareholders may want to check for free if Duke Energy insiders are buying or selling shares.

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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