We Think Some Shareholders May Hesitate To Increase ONE Gas, Inc.'s (NYSE:OGS) CEO Compensation

Key Insights

• ONE Gas to hold its Annual General Meeting on 22nd of May
• CEO Sid McAnnally's total compensation includes salary of US$850.0k
• Total compensation is similar to the industry average
• ONE Gas' EPS grew by 1.2% over the past three years while total shareholder loss over the past three years was 4.8%

Our free stock report includes 2 warning signs investors should be aware of before investing in ONE Gas. Read for free now.

In the past three years, shareholders of ONE Gas, Inc. (NYSE:OGS) have seen a loss on their investment. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 22nd of May. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for ONE Gas

How Does Total Compensation For Sid McAnnally Compare With Other Companies In The Industry?

According to our data, ONE Gas, Inc. has a market capitalization of US$4.3b, and paid its CEO total annual compensation worth US$5.2m over the year to December 2024. Notably, that's an increase of 15% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$850k.

On comparing similar companies from the American Gas Utilities industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$5.2m. This suggests that ONE Gas remunerates its CEO largely in line with the industry average. What's more, Sid McAnnally holds US$3.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	US$850k	US$735k	16%
Other	US$4.3m	US$3.8m	84%
Total Compensation	US$5.2m	US$4.5m	100%

On an industry level, around 17% of total compensation represents salary and 83% is other remuneration. There isn't a significant difference between ONE Gas and the broader market, in terms of salary allocation in the overall compensation package. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at ONE Gas, Inc.'s Growth Numbers

ONE Gas, Inc. has seen its earnings per share (EPS) increase by 1.2% a year over the past three years. It achieved revenue growth of 7.7% over the last year.

We'd prefer higher revenue growth, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has ONE Gas, Inc. Been A Good Investment?

Given the total shareholder loss of 4.8% over three years, many shareholders in ONE Gas, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 2 warning signs for ONE Gas (1 can't be ignored!) that you should be aware of before investing here.

Switching gears from ONE Gas, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.