What Did Norfolk Southern Corporation's (NYSE:NSC) CEO Take Home Last Year?

Jim Squires has been the CEO of Norfolk Southern Corporation (NYSE:NSC) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Norfolk Southern

How Does Jim Squires's Compensation Compare With Similar Sized Companies?

According to our data, Norfolk Southern Corporation has a market capitalization of US$40b, and paid its CEO total annual compensation worth US$17m over the year to December 2019. We note that's an increase of 17% above last year. While we always look at total compensation first, we note that the salary component is less, at US$1.1m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$12m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Norfolk Southern stands. Speaking on an industry level, we can see that nearly 17% of total compensation represents salary, while the remainder of 83% is other remuneration. Readers will want to know that Norfolk Southern pays a modest slice of remuneration through salary, as compared to the wider sector.

As you can see, Jim Squires is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean Norfolk Southern Corporation is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance. The graphic below shows how CEO compensation at Norfolk Southern has changed from year to year.

Is Norfolk Southern Corporation Growing?

Over the last three years Norfolk Southern Corporation has seen earnings per share (EPS) move in a positive direction by an average of 11% per year (using a line of best fit). It saw its revenue drop 1.4% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. It could be important to check this free visual depiction of what analysts expect for the future.

Has Norfolk Southern Corporation Been A Good Investment?

I think that the total shareholder return of 42%, over three years, would leave most Norfolk Southern Corporation shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We compared the total CEO remuneration paid by Norfolk Southern Corporation, and compared it to remuneration at a group of other large companies. As discussed above, we discovered that the company pays more than the median of that group.

However, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Moving away from CEO compensation for the moment, we've identified 2 warning signs for Norfolk Southern that you should be aware of before investing.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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