Yahoo Finance This Is Why Dominion Energy, Inc.'s (NYSE:D) CEO Compensation Looks Appropriate
Key Insights
Dominion Energy's Annual General Meeting to take place on 7th of May
Total pay for CEO Bob Blue includes US$1.23m salary
The overall pay is 35% below the industry average
Dominion Energy's EPS grew by 13% over the past three years while total shareholder loss over the past three years was 27%
The performance at Dominion Energy, Inc. (NYSE:D) has been rather lacklustre of late and shareholders may be wondering what CEO Bob Blue is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 7th of May. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We think CEO compensation looks appropriate given the data we have put together.
See our latest analysis for Dominion Energy
How Does Total Compensation For Bob Blue Compare With Other Companies In The Industry?
At the time of writing, our data shows that Dominion Energy, Inc. has a market capitalization of US$43b, and reported total annual CEO compensation of US$6.3m for the year to December 2023. That's slightly lower by 7.6% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.2m.
On comparing similar companies in the American Integrated Utilities industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$9.6m. This suggests that Bob Blue is paid below the industry median. Furthermore, Bob Blue directly owns US$9.2m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.2m | US$1.2m | 20% |
Other | US$5.1m | US$5.6m | 80% |
Total Compensation | US$6.3m | US$6.8m | 100% |
Speaking on an industry level, nearly 13% of total compensation represents salary, while the remainder of 87% is other remuneration. According to our research, Dominion Energy has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Dominion Energy, Inc.'s Growth
Dominion Energy, Inc.'s earnings per share (EPS) grew 13% per year over the last three years. Its revenue is up 3.3% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Dominion Energy, Inc. Been A Good Investment?
Since shareholders would have lost about 27% over three years, some Dominion Energy, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
The fact that shareholders have earned a negative share price return is certainly disconcerting. The share price trend has diverged with the robust growth in EPS however, suggesting there may be other factors that could be driving the price performance. There needs to be more focus by management and the board to examine why the share price has diverged from fundamentals. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Dominion Energy that investors should think about before committing capital to this stock.
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.
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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.
