Key Insights

• CMS Energy's Annual General Meeting to take place on 3rd of May
• CEO Garrick Rochow's total compensation includes salary of US$1.24m
• The total compensation is similar to the average for the industry
• CMS Energy's total shareholder return over the past three years was 1.0% while its EPS grew by 5.5% over the past three years

Under the guidance of CEO Garrick Rochow, CMS Energy Corporation (NYSE:CMS) has performed reasonably well recently. As shareholders go into the upcoming AGM on 3rd of May, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Here is our take on why we think the CEO compensation looks appropriate.

How Does Total Compensation For Garrick Rochow Compare With Other Companies In The Industry?

Our data indicates that CMS Energy Corporation has a market capitalization of US$18b, and total annual CEO compensation was reported as US$9.6m for the year to December 2023. Notably, that's an increase of 11% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.

In comparison with other companies in the American Integrated Utilities industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$9.6m. So it looks like CMS Energy compensates Garrick Rochow in line with the median for the industry. Moreover, Garrick Rochow also holds US$27m worth of CMS Energy stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 13% of total compensation represents salary and 87% is other remuneration. There isn't a significant difference between CMS Energy and the broader market, in terms of salary allocation in the overall compensation package. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

CMS Energy Corporation's Growth

Over the past three years, CMS Energy Corporation has seen its earnings per share (EPS) grow by 5.5% per year. It saw its revenue drop 14% over the last year.

We would prefer it if there was revenue growth, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 CMS Energy Corporation Been A Good Investment?

CMS Energy Corporation has not done too badly by shareholders, with a total return of 1.0%, over three years. It would be nice to see that metric improve in the future. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

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 CMS Energy (1 is potentially serious!) 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.

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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.