CEO Robert Trauschke has done a decent job of delivering relatively good performance at OGE Energy Corp. (NYSE:OGE) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 20 May 2021. Here is our take on why we think the CEO compensation looks appropriate.
Comparing OGE Energy Corp.'s CEO Compensation With the industry
Our data indicates that OGE Energy Corp. has a market capitalization of US$6.6b, and total annual CEO compensation was reported as US$5.4m for the year to December 2020. We note that's a decrease of 16% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.1m.
In comparison with other companies in the industry with market capitalizations ranging from US$4.0b to US$12b, the reported median CEO total compensation was US$5.9m. This suggests that OGE Energy remunerates its CEO largely in line with the industry average. Moreover, Robert Trauschke also holds US$11m worth of OGE Energy stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 12% of total compensation out of all the companies we analyzed, while other remuneration made up 88% of the pie. It's interesting to note that OGE Energy pays out a greater portion of remuneration through salary, compared to the industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at OGE Energy Corp.'s Growth Numbers
OGE Energy Corp. has reduced its earnings per share by 17% a year over the last three years. It achieved revenue growth of 53% over the last year.
The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has OGE Energy Corp. Been A Good Investment?
With a total shareholder return of 15% over three years, OGE Energy Corp. shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
Although the company has performed relatively well, we still think there are some areas that could be improved. We reckon that there are some shareholders who may be hesitant to increase CEO pay further until EPS growth starts to improve, despite the robust revenue growth.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 2 warning signs for OGE Energy you should be aware of, and 1 of them is potentially serious.
Important note: OGE Energy is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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