In 2015 Mauricio Gutierrez was appointed CEO of NRG Energy, Inc. (NYSE:NRG). First, this article will compare CEO compensation with compensation at other large companies. Then we’ll look at a snap shot of the business growth. 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.
How Does Mauricio Gutierrez’s Compensation Compare With Similar Sized Companies?
Our data indicates that NRG Energy, Inc. is worth US$12b, and total annual CEO compensation is US$8.9m. (This number is for the twelve months until December 2018). That’s actually a decrease on the year before. While we always look at total compensation first, we note that the salary component is less, at US$1.2m. 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).
That means Mauricio Gutierrez receives fairly typical remuneration for the CEO of a large company. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at NRG Energy, below.
Is NRG Energy, Inc. Growing?
On average over the last three years, NRG Energy, Inc. has grown earnings per share (EPS) by 90% each year (using a line of best fit). Its revenue is up 4.5% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.
Has NRG Energy, Inc. Been A Good Investment?
Most shareholders would probably be pleased with NRG Energy, Inc. for providing a total return of 189% over three years. 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.
Mauricio Gutierrez is paid around what is normal the leaders of larger companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. So one could argue the CEO compensation is quite modest, if you consider company performance! Whatever your view on compensation, you might want to check if insiders are buying or selling NRG Energy shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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