Key Insights

• Sunnova Energy International's Annual General Meeting to take place on 15th of May
• CEO John Berger's total compensation includes salary of US$620.8k
• The overall pay is 4,449% above the industry average
• Over the past three years, Sunnova Energy International's EPS fell by 18% and over the past three years, the total loss to shareholders 84%

Sunnova Energy International Inc. (NYSE:NOVA) has not performed well recently and CEO John Berger will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 15th of May. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

How Does Total Compensation For John Berger Compare With Other Companies In The Industry?

According to our data, Sunnova Energy International Inc. has a market capitalization of US$548m, and paid its CEO total annual compensation worth US$5.9m over the year to December 2023. We note that's an increase of 9.5% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$621k.

On comparing similar companies from the American Renewable Energy industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$129k. This suggests that John Berger is paid more than the median for the industry. What's more, John Berger holds US$1.8m worth of shares in the company in their own name.

Talking in terms of the industry, salary represented approximately 18% of total compensation out of all the companies we analyzed, while other remuneration made up 82% of the pie. Sunnova Energy International sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Sunnova Energy International Inc.'s Growth Numbers

Over the last three years, Sunnova Energy International Inc. has shrunk its earnings per share by 18% per year. In the last year, its revenue is up 10%.

The decline in EPS is a bit concerning. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Sunnova Energy International Inc. Been A Good Investment?

With a total shareholder return of -84% over three years, Sunnova Energy International Inc. shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 5 warning signs (and 3 which are significant) in Sunnova Energy International we think you should know about.

Switching gears from Sunnova Energy International, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.