Is ONE Gas, Inc.’s (NYSE:OGS) CEO Pay Justified?

Pierce Norton became the CEO of ONE Gas, Inc. (NYSE:OGS) in 2014. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for ONE Gas

How Does Pierce Norton’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that ONE Gas, Inc. has a market cap of US$4.7b, and is paying total annual CEO compensation of US$4.2m. (This number is for the twelve months until December 2018). While we always look at total compensation first, we note that the salary component is less, at US$775k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$5.1m.

That means Pierce Norton 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.

You can see a visual representation of the CEO compensation at ONE Gas, below.

NYSE:OGS CEO Compensation, August 8th 2019
NYSE:OGS CEO Compensation, August 8th 2019

Is ONE Gas, Inc. Growing?

ONE Gas, Inc. has increased its earnings per share (EPS) by an average of 9.9% a year, over the last three years (using a line of best fit). In the last year, its revenue changed by just 0.8%.

I’d prefer higher revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise.

Has ONE Gas, Inc. Been A Good Investment?

Most shareholders would probably be pleased with ONE Gas, Inc. for providing a total return of 52% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary…

Pierce Norton is paid around the same as most CEOs of similar size companies.

The company isn’t showing particularly great growth, but shareholder returns have been pleasing. So we can conclude that on this analysis the CEO compensation seems pretty sound. So you may want to check if insiders are buying ONE Gas shares with their own money (free access).

If you want to buy a stock that is better than ONE Gas, 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.