This article will reflect on the compensation paid to Jim Robo who has served as CEO of NextEra Energy, Inc. (NYSE:NEE) since 2012. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for NextEra Energy.

View our latest analysis for NextEra Energy

Comparing NextEra Energy, Inc.'s CEO Compensation With the industry

According to our data, NextEra Energy, Inc. has a market capitalization of US$148b, and paid its CEO total annual compensation worth US$22m over the year to December 2019. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.5m.

For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$14m. Hence, we can conclude that Jim Robo is remunerated higher than the industry median. What's more, Jim Robo holds US$91m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 14% of total compensation represents salary and 86% is other remuneration. In NextEra Energy's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

NextEra Energy, Inc.'s Growth

Over the last three years, NextEra Energy, Inc. has shrunk its earnings per share by 3.7% per year. It saw its revenue drop 4.3% over the last year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 NextEra Energy, Inc. Been A Good Investment?

Most shareholders would probably be pleased with NextEra Energy, Inc. for providing a total return of 112% 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.

To Conclude...

As we touched on above, NextEra Energy, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. We feel that EPS have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So while we would not say that Jim is generously paid, stockholders would want to see some EPS growth before agreeing that a raise is a good idea.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which is significant) in NextEra Energy we think you should know about.

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.

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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