Pierce Norton became the CEO of ONE Gas, Inc. (NYSE:OGS) in 2014, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for ONE Gas.
How Does Total Compensation For Pierce Norton Compare With Other Companies In The Industry?
According to our data, ONE Gas, Inc. has a market capitalization of US$4.4b, and paid its CEO total annual compensation worth US$5.6m over the year to December 2019. That's a notable increase of 33% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$800k.
In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$5.1m. This suggests that ONE Gas remunerates its CEO largely in line with the industry average. Furthermore, Pierce Norton directly owns US$20m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, roughly 18% of total compensation represents salary and 82% is other remuneration. In ONE Gas' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
ONE Gas, Inc.'s Growth
ONE Gas, Inc.'s earnings per share (EPS) grew 5.8% per year over the last three years. In the last year, its revenue is down 10.0%.
We generally like to see a little revenue growth, but the modest EPSgrowth gives us some relief. 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 ONE Gas, Inc. Been A Good Investment?
With a total shareholder return of 12% over three years, ONE Gas, Inc. shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
As we noted earlier, ONE Gas pays its CEO in line with similar-sized companies belonging to the same industry. But the company has failed to produce substantial growth in either EPS or total shareholder return. We'd say that Pierce is remunerated reasonably, but shareholders might be looking for better returns before they agree Pierce deserves a raise.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for ONE Gas (1 is a bit concerning!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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