David Anderson became the CEO of Northwest Natural Holding Company (NYSE:NWN) in 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does David Anderson’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Northwest Natural Holding Company has a market cap of US$2.1b, and reported total annual CEO compensation of US$3.6m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$679k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.1m.
That means David Anderson receives fairly typical remuneration for the CEO of a company that size. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance. Shareholders might be interested in this free visualization of analyst forecasts.
The graphic below shows how CEO compensation at Northwest Natural Holding has changed from year to year.
Is Northwest Natural Holding Company Growing?
On average over the last three years, Northwest Natural Holding Company has grown earnings per share (EPS) by 2.6% each year (using a line of best fit). In the last year, its revenue is up 1.9%.
I’m not particularly impressed by the revenue growth, but it is good to see modest EPS growth. Considering these factors I’d say performance has been pretty decent, though not amazing.
Has Northwest Natural Holding Company Been A Good Investment?
Northwest Natural Holding Company has generated a total shareholder return of 32% over three years, so most shareholders would be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
David Anderson is paid around what is normal the leaders of comparable size companies.
We think many would like to see better growth. While there is room for improvement, we haven’t seen evidence to suggest the pay is too generous. Shareholders may want to check for free if Northwest Natural Holding insiders are buying or selling shares.
If you want to buy a stock that is better than Northwest Natural Holding, this free list of high return, low debt companies is a great place to look.
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