In 2015 Mike Renna was appointed CEO of South Jersey Industries Inc (NYSE:SJI). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Mike Renna’s Compensation Compare With Similar Sized Companies?
Our data indicates that South Jersey Industries Inc is worth US$2.7b, and total annual CEO compensation is US$8.3m. (This figure is for the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$696k. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO compensation was US$4.9m.
As you can see, Mike Renna is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean South Jersey Industries Inc is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance. So this free visual report on analyst forecasts could hold they key to an excellent investment decision.
You can see a visual representation of the CEO compensation at South Jersey Industries, below.
Is South Jersey Industries Inc Growing?
South Jersey Industries Inc has reduced its earnings per share by an average of 63% a year, over the last three years. In the last year, its revenue is up 14%.
Few shareholders would be pleased to read that earnings per share are lower over three years. There’s no doubt that the silver lining is that revenue is up. But it isn’t sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.
Has South Jersey Industries Inc Been A Good Investment?
Most shareholders would probably be pleased with South Jersey Industries Inc for providing a total return of 54% over three years. This strong performance might mean some shareholders don’t mind if the CEO is paid more than is normal for a company of its size.
We examined the amount South Jersey Industries Inc pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.We think many shareholders would be underwhelmed with the business growth over the last three years.
However, we can’t argue with the strong returns to shareholders, over the same time period. Considering this, shareholders are probably not too worried about the CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling South Jersey Industries shares (free trial).
If you want to buy a stock that is better than South Jersey Industries, this free list of high return, low debt companies is a great place to look.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.