Is Pattern Energy Group Inc.'s (NASDAQ:PEGI) CEO Overpaid Relative To Its Peers?
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In 2012 Mike Garland was appointed CEO of Pattern Energy Group Inc. (NASDAQ:PEGI). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Pattern Energy Group
How Does Mike Garland's Compensation Compare With Similar Sized Companies?
According to our data, Pattern Energy Group Inc. has a market capitalization of US$2.3b, and pays its CEO total annual compensation worth US$2.1m. (This is based on the year to December 2018). Notably, that's an increase of 11% over the year before. While we always look at total compensation first, we note that the salary component is less, at US$453k. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$4.1m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see a visual representation of the CEO compensation at Pattern Energy Group, below.
Is Pattern Energy Group Inc. Growing?
Over the last three years Pattern Energy Group Inc. has grown its earnings per share (EPS) by an average of 90% per year (using a line of best fit). It achieved revenue growth of 18% over the last year.
This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Pattern Energy Group Inc. Been A Good Investment?
Boasting a total shareholder return of 40% over three years, Pattern Energy Group Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
It appears that Pattern Energy Group Inc. remunerates its CEO below most similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. The strong history of shareholder returns might even have some thinking that Mike Garland deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. It would be even more positive if company insiders are buying shares. Shareholders may want to check for free if Pattern Energy Group insiders are buying or selling shares.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
