Should Shareholders Reconsider Southwest Gas Holdings, Inc.'s (NYSE:SWX) CEO Compensation Package?

Key Insights

• Southwest Gas Holdings to hold its Annual General Meeting on 1st of May
• CEO Karen Haller's total compensation includes salary of US$1.02m
• The overall pay is 32% above the industry average
• Over the past three years, Southwest Gas Holdings' EPS fell by 6.6% and over the past three years, the total loss to shareholders 8.7%

Our free stock report includes 1 warning sign investors should be aware of before investing in Southwest Gas Holdings. Read for free now.

Shareholders will probably not be too impressed with the underwhelming results at Southwest Gas Holdings, Inc. (NYSE:SWX) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 1st of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Southwest Gas Holdings

How Does Total Compensation For Karen Haller Compare With Other Companies In The Industry?

Our data indicates that Southwest Gas Holdings, Inc. has a market capitalization of US$5.3b, and total annual CEO compensation was reported as US$8.2m for the year to December 2024. That's a notable increase of 14% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.0m.

In comparison with other companies in the American Gas Utilities industry with market capitalizations ranging from US$4.0b to US$12b, the reported median CEO total compensation was US$6.2m. This suggests that Karen Haller is paid more than the median for the industry. What's more, Karen Haller holds US$9.6m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	US$1.0m	US$875k	13%
Other	US$7.1m	US$6.3m	87%
Total Compensation	US$8.2m	US$7.1m	100%

Talking in terms of the industry, salary represented approximately 17% of total compensation out of all the companies we analyzed, while other remuneration made up 83% of the pie. Southwest Gas Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Southwest Gas Holdings, Inc.'s Growth

Over the last three years, Southwest Gas Holdings, Inc. has shrunk its earnings per share by 6.6% per year. It saw its revenue drop 5.9% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Southwest Gas Holdings, Inc. Been A Good Investment?

Since shareholders would have lost about 8.7% over three years, some Southwest Gas Holdings, Inc. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Southwest Gas Holdings that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.