This is the first in this series where I will walk through various industries and benchmark overall executive compensation. Further articles will be accessible to paid subscribers only.
Electric Services
The Electric Services industry was chosen largely because I’ve been digging deeper into renewables-focused companies, and one of the largest (NextEra Energy) sits within this SIC classification.
If you’d like to see a different industry for the next analysis, feel free to let me know in the comments section. I will likely focus on Shale Producers next.
The standard definition of these companies is:
Establishments engaged in the generation, transmission, and/or distribution of electric energy for sale.
So basically, electricity providers, where electricity is commonly generated through either coal, natural gas, wind, solar, nuclear, etc, etc.. Companies within this analysis include:
Data Sourcing
Financial data, links to filings, and SIC classifiers are accessed via the SEC API, while compensation data is scraped from Annual Proxy Filings.
Scraping non-standardized html tables is… not easy. I’ve found traditional R-based html table extraction through rvest to be not-applicable for my purposes, so some customized code was built to make these tables more usable (as well as locate the one I’m looking for). While not 100% consistent, testing for this article has it closer to 90%, with some bit of data cleanup at the latter stage. So, instead of having to visually inspect hundreds of tables over multiple periods, I can run a loop through each company and auto-populate this data.
Compensation
Generally, overall revenue for the target list has grown through 2018, and flattened down in 2019 before what was likely a COVID-influenced downdip in 2020. Overall CEO compensation took a dip in 2020 as well likely as a result.
Components by Role
Based on 2020 disclosures, the top executives (Chariman/CEO/President), which are sometimes all in the same, tend to derive more of their income from non-salaried items than the others.
Still, at the highest (CFO) 27% of total compensation comes from actual salary.
Stock Awards tend to be the lions-share, which makes sense as the board would look to align performance with compensation. Of course, this can tend to create some misalignment, as management will focus more on pumping the share price in the near-term as opposed to long-term strategic decisions.
Components by Company
On a per-company basis, generally most average below 35% for total salaries as percentage of compensation, though Ocean Power Technologies Inc (OPTT) is an outlier at about 80%.
Somewhat notable is that OPTT also has the lowest revenue of the bunch (bringing in a paltry ~1.7 million in 2020).
To the barely-trained eye, it does appear that compensation skews towards more bonus-heavy as the company gets larger.
The Winners
So who brought in the lions-share from a total compensation perspective? Well, if you shared the title of Chairman & CEO, you tended to reap the rewards. Of course, this may be a bit misleading, as total CEO pay tends to trend with overall revenue.
Also notable in the graph above, I only count 3 women in the list (Constance Lau, Patricia Collawn, and Maria Pope), so a lot more work to do on the diversity front from a CEO-perspective.
Once again, OPTT stands out, though mainly because the CEO eats up about 31% of total revenues. On the plus side for the ladies, Constance Patricia, and Maria do tend to be above average when it comes to pay as a percent of revenue.
Once again, outside of Dominion, the top four names are at the top of the revenue list.
Summary
Not much I can say here beyond what we’ve seen already. Of course, in the humor category, I found this little data nugget while going through some text analysis.
Future plan is to incorporate:
Industry-Level Benchmarking
Performance Thresholds
Pay vs Median Employee
Director-Level Analysis
Other Financial Metric comparisons
Share-price considerations
While I’d love to add these now, there’s additional code to build out and test to ensure it’s repeatable (I’m lazy and cheap so bear with me). If there’s anything specific you’d like to see, please reach out.