This article will reflect on the compensation paid to Joe Hamrock who has served as CEO of NiSource Inc. (NYSE:NI) since 2015. This analysis will also assess whether NiSource pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Joe Hamrock Compare With Other Companies In The Industry?
According to our data, NiSource Inc. has a market capitalization of US$9.2b, and paid its CEO total annual compensation worth US$6.6m over the year to December 2019. Notably, that's an increase of 15% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.
On comparing similar companies from the same industry with market caps ranging from US$4.0b to US$12b, we found that the median CEO total compensation was US$2.3m. This suggests that Joe Hamrock is paid more than the median for the industry. What's more, Joe Hamrock holds US$11m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 13% of total compensation represents salary, while the remainder of 87% is other remuneration. NiSource is paying a higher share of its remuneration through a salary in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at NiSource Inc.'s Growth Numbers
NiSource Inc. has reduced its earnings per share by 23% a year over the last three years. In the last year, its revenue is down 5.5%.
The decline in earnings is a bit concerning. 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 NiSource Inc. Been A Good Investment?
NiSource Inc. has generated a total shareholder return of 1.1% over three years, so most shareholders wouldn't be too disappointed. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
As we touched on above, NiSource 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. Meanwhile, earnings per share has not been growing sufficiently to impress us, over the last three years. While shareholder returns are acceptable, they don't delight. So you can understand why we do not think CEO compensation is particularly modest!
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for NiSource (1 shouldn't be ignored!) that you should be aware of before investing here.
Switching gears from NiSource, 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.
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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