In 2012 Jim Robo was appointed CEO of NextEra Energy, Inc. (NYSE:NEE). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Jim Robo’s Compensation Compare With Similar Sized Companies?
According to our data, NextEra Energy, Inc. has a market capitalization of US$91b, and pays its CEO total annual compensation worth US$19m. (This is based on the year to December 2017). 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$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).
Thus we can conclude that Jim Robo receives more in total compensation than the median of a group of large companies in the same market as NextEra Energy, Inc.. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at NextEra Energy has changed from year to year.
Is NextEra Energy, Inc. Growing?
On average over the last three years, NextEra Energy, Inc. has grown earnings per share (EPS) by 43% each year (using a line of best fit). In the last year, its revenue is down -2.6%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Shareholders might be interested in this free visualization of analyst forecasts.
Has NextEra Energy, Inc. Been A Good Investment?
Boasting a total shareholder return of 74% over three years, NextEra Energy, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount NextEra Energy, Inc. pays its CEO, and compared it to the amount paid by other large companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Shareholders may want to check for free if NextEra Energy insiders are buying or selling shares.
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 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.