Essential Utilities, Inc.'s (NYSE:WTRG) CEO Compensation Is Looking A Bit Stretched At The Moment

Under the guidance of CEO Chris Franklin, Essential Utilities, Inc. (NYSE:WTRG) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 05 May 2021. However, some shareholders may still want to keep CEO compensation within reason.

Check out our latest analysis for Essential Utilities

Comparing Essential Utilities, Inc.'s CEO Compensation With the industry

According to our data, Essential Utilities, Inc. has a market capitalization of US$11b, and paid its CEO total annual compensation worth US$7.2m over the year to December 2020. Notably, that's an increase of 23% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$859k.

On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$3.8m. Accordingly, our analysis reveals that Essential Utilities, Inc. pays Chris Franklin north of the industry median. Moreover, Chris Franklin also holds US$6.1m worth of Essential Utilities 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 28% of total compensation out of all the companies we analyzed, while other remuneration made up 72% of the pie. Essential Utilities sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Essential Utilities, Inc.'s Growth

Essential Utilities, Inc. has reduced its earnings per share by 5.5% a year over the last three years. In the last year, its revenue is up 64%.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Essential Utilities, Inc. Been A Good Investment?

We think that the total shareholder return of 42%, over three years, would leave most Essential Utilities, Inc. shareholders smiling. 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...

The overall company performance has been commendable, however there are still areas for improvement. EPS growth is still weak, and until that picks up, shareholders may find it hard to approve a pay rise for the CEO, since they are already paid above the average in their industry.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Essential Utilities that investors should look into moving forward.

Switching gears from Essential Utilities, 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. 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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