Yahoo Finance Shareholders May Not Be So Generous With SJW Group's (NYSE:SJW) CEO Compensation And Here's Why
Key Insights
SJW Group will host its Annual General Meeting on 20th of June
Total pay for CEO Eric Thornburg includes US$874.0k salary
The total compensation is 1,441% higher than the average for the industry
Over the past three years, SJW Group's EPS grew by 7.0% and over the past three years, the total loss to shareholders 17%
In the past three years, the share price of SJW Group (NYSE:SJW) has struggled to grow and now shareholders are sitting on a loss. 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 20th of June could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
See our latest analysis for SJW Group
How Does Total Compensation For Eric Thornburg Compare With Other Companies In The Industry?
According to our data, SJW Group has a market capitalization of US$1.7b, and paid its CEO total annual compensation worth US$4.2m over the year to December 2023. That's a notable increase of 32% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$874k.
For comparison, other companies in the American Water Utilities industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$273k. Hence, we can conclude that Eric Thornburg is remunerated higher than the industry median. What's more, Eric Thornburg holds US$2.4m worth of shares in the company in their own name.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$874k | US$828k | 21% |
Other | US$3.3m | US$2.4m | 79% |
Total Compensation | US$4.2m | US$3.2m | 100% |
On an industry level, roughly 38% of total compensation represents salary and 62% is other remuneration. It's interesting to note that SJW Group allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at SJW Group's Growth Numbers
SJW Group has seen its earnings per share (EPS) increase by 7.0% a year over the past three years. In the last year, its revenue is up 7.7%.
We're not particularly impressed by the revenue growth, but the modest improvement in EPS is good. Considering these factors we'd say performance has been pretty decent, though not amazing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has SJW Group Been A Good Investment?
Since shareholders would have lost about 17% over three years, some SJW Group investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 1 which makes us a bit uncomfortable) in SJW Group we think you should know about.
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.
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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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
