Why NextEra Energy, Inc.'s (NYSE:NEE) CEO Pay Matters To You

Jim Robo became the CEO of NextEra Energy, Inc. (NYSE:NEE) in 2012. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big 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.

Check out our latest analysis for NextEra Energy

How Does Jim Robo's Compensation Compare With Similar Sized Companies?

Our data indicates that NextEra Energy, Inc. is worth US$104b, and total annual CEO compensation is US$21m. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$1.4m. When we examined a group of companies with market caps over US$8.0b, we found that their 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. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

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

Is NextEra Energy, Inc. Growing?

Over the last three years NextEra Energy, Inc. has grown its earnings per share (EPS) by an average of 21% per year (using a line of best fit). In the last year, its revenue is up 6.8%.

This demonstrates that the company has been improving recently. A good result. It's also good to see modest revenue growth, suggesting the underlying business is healthy.

Has NextEra Energy, Inc. Been A Good Investment?

Boasting a total shareholder return of 85% over three years, NextEra Energy, Inc. has done well by shareholders. 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...

We compared the total CEO remuneration paid by NextEra Energy, Inc., and compared it to remuneration at a group of other large companies. As discussed above, we discovered that the company pays more than the median of that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying NextEra Energy shares with their own money (free access).

If you want to buy a stock that is better than NextEra Energy, this free list of high return, low debt companies is a great place to look.

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.