Key Insights

• Unitil's Annual General Meeting to take place on 1st of May
• Total pay for CEO Tom Meissner includes US$678.1k salary
• Total compensation is 180% above industry average
• Unitil's EPS grew by 9.1% over the past three years while total shareholder loss over the past three years was 3.1%

In the past three years, the share price of Unitil Corporation (NYSE:UTL) has struggled to generate growth for its shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 1st of May. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should 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$820m, and total annual CEO compensation was reported as US$2.6m for the year to December 2023. We note that's an increase of 76% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$678k.

In comparison with other companies in the American Integrated Utilities industry with market capitalizations ranging from US$400m to US$1.6b, the reported median CEO total compensation was US$937k. This suggests that Tom Meissner is paid more than the median for the industry. What's more, Tom Meissner holds US$6.0m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 13% of total compensation represents salary and 87% is other remuneration. 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.

A Look at Unitil Corporation's Growth Numbers

Unitil Corporation's earnings per share (EPS) grew 9.1% per year over the last three years. Its revenue is down 1.1% over the previous year.

We generally like to see a little 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?

Given the total shareholder loss of 3.1% over three years, many shareholders in Unitil Corporation are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for Unitil you should be aware of, and 1 of them is potentially serious.

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. 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.