Jim Robo has been the CEO of NextEra Energy Inc (NYSE:NEE) since 2012. First, this article will compare CEO compensation with compensation at other large companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for NextEra Energy
How Does Jim Robo’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that NextEra Energy Inc has a market cap of US$87b, and is paying total annual CEO compensation of US$19m. (This figure is for the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$1.4m. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO 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).
As you can see, Jim Robo is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean NextEra Energy Inc is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance. So this free visual report on analyst forecasts could hold they key to an excellent investment decision.
You can see a visual representation of the CEO compensation at NextEra Energy, below.
Is NextEra Energy Inc Growing?
Over the last three years NextEra Energy Inc has grown its earnings per share (EPS) by an average of 44% per year. In the last year, its revenue is down -3.1%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important.
Has NextEra Energy Inc Been A Good Investment?
Boasting a total shareholder return of 101% over three years, NextEra Energy Inc has done well by shareholders. This strong performance might mean some shareholders don’t mind if the CEO is paid more than is normal for a company of its size.
In Summary…
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. As a result of this good performance, the CEO remuneration may well be quite reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling NextEra 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.