Chris Crane became the CEO of Exelon Corporation (NASDAQ:EXC) in 2012, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Chris Crane Compare With Other Companies In The Industry?
According to our data, Exelon Corporation has a market capitalization of US$34b, and paid its CEO total annual compensation worth US$15m over the year to December 2019. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.3m.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$15m. So it looks like Exelon compensates Chris Crane in line with the median for the industry. Moreover, Chris Crane also holds US$23m worth of Exelon stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 14% of total compensation out of all the companies we analyzed, while other remuneration made up 86% of the pie. Exelon pays a modest slice of remuneration through salary, as compared to the broader 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 Exelon Corporation's Growth Numbers
Over the past three years, Exelon Corporation has seen its earnings per share (EPS) grow by 12% per year. Its revenue is down 5.7% over the previous year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Exelon Corporation Been A Good Investment?
Exelon Corporation has not done too badly by shareholders, with a total return of 4.5%, over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
As we touched on above, Exelon Corporation is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But EPS growth for the company has been strong over the last three years, though shareholder returns in comparison haven't been as impressive. As a result of these considerations, we would suggest the compensation is reasonable, but looking ahead shareholders will likely want to see healthier returns.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Exelon (1 is concerning!) that you should be aware of before investing here.
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.
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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