Yahoo Finance It's Unlikely That Unitil Corporation's (NYSE:UTL) CEO Will See A Huge Pay Rise This Year
Key Insights
Unitil will host its Annual General Meeting on 1st of May
Salary of US$678.1k is part of CEO Tom Meissner's total remuneration
The overall pay is 179% above the industry average
Unitil's three-year loss to shareholders was 4.2% while its EPS grew by 9.1% over the past three years
As many shareholders of Unitil Corporation (NYSE:UTL) will be aware, they have not made a gain on their investment in the past three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 1st of May could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
View our latest analysis for Unitil
How Does Total Compensation For Tom Meissner Compare With Other Companies In The Industry?
Our data indicates that Unitil Corporation has a market capitalization of US$816m, and total annual CEO compensation was reported as US$2.6m for the year to December 2023. That's a notable increase of 76% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$678k.
On comparing similar companies from the American Integrated Utilities industry with market caps ranging from US$400m to US$1.6b, we found that the median CEO total compensation was US$940k. This suggests that Tom Meissner is paid more than the median for the industry. Moreover, Tom Meissner also holds US$5.9m worth of Unitil stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$678k | US$645k | 26% |
Other | US$1.9m | US$843k | 74% |
Total Compensation | US$2.6m | US$1.5m | 100% |
Talking in terms of the industry, salary represented approximately 13% of total compensation out of all the companies we analyzed, while other remuneration made up 87% of the pie. Unitil is paying a higher share of its remuneration through a 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.
Unitil Corporation's Growth
Unitil Corporation's earnings per share (EPS) grew 9.1% per year over the last three years. In the last year, its revenue is down 1.1%.
We would prefer it if there was revenue growth, but the modest EPS growth gives us some relief. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Unitil Corporation Been A Good Investment?
Since shareholders would have lost about 4.2% over three years, some Unitil Corporation investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which is a bit concerning) in Unitil we think you should know about.
Important note: Unitil is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
