We Think Shareholders May Want To Consider A Review Of Eversource Energy's (NYSE:ES) CEO Compensation Package

Key Insights

• Eversource Energy's Annual General Meeting to take place on 1st of May
• Total pay for CEO Joe Nolan includes US$1.33m salary
• The total compensation is 39% higher than the average for the industry
• Eversource Energy's three-year loss to shareholders was 21% while its EPS was down 18% over the past three years

Eversource Energy (NYSE:ES) has not performed well recently and CEO Joe Nolan will probably need to up their game. At the upcoming AGM on 1st of May, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Eversource Energy

Comparing Eversource Energy's CEO Compensation With The Industry

According to our data, Eversource Energy has a market capitalization of US$21b, and paid its CEO total annual compensation worth US$19m over the year to December 2023. Notably, that's an increase of 46% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.3m.

For comparison, other companies in the American Electric Utilities industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$14m. Accordingly, our analysis reveals that Eversource Energy pays Joe Nolan north of the industry median. Furthermore, Joe Nolan directly owns US$3.8m worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	US$1.3m	US$1.3m	7%
Other	US$18m	US$12m	93%
Total Compensation	US$19m	US$13m	100%

Talking in terms of the industry, salary represented approximately 11% of total compensation out of all the companies we analyzed, while other remuneration made up 89% of the pie. In Eversource Energy's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Eversource Energy's Growth Numbers

Over the last three years, Eversource Energy has shrunk its earnings per share by 18% per year. In the last year, its revenue is down 3.1%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Eversource Energy Been A Good Investment?

Since shareholders would have lost about 21% over three years, some Eversource Energy investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Eversource Energy that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.