Is Columbia Property Trust, Inc.'s (NYSE:CXP) CEO Pay Justified?
E. Mills has been the CEO of Columbia Property Trust, Inc. (NYSE:CXP) since 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Columbia Property Trust
How Does E. Mills's Compensation Compare With Similar Sized Companies?
According to our data, Columbia Property Trust, Inc. has a market capitalization of US$2.3b, and paid its CEO total annual compensation worth US$4.9m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$824k. 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 from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.1m.
So E. Mills receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Columbia Property Trust has changed from year to year.
Is Columbia Property Trust, Inc. Growing?
Over the last three years Columbia Property Trust, Inc. has shrunk its earnings per share by an average of 27% per year (measured with a line of best fit). It achieved revenue growth of 5.0% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has Columbia Property Trust, Inc. Been A Good Investment?
Columbia Property Trust, Inc. has generated a total shareholder return of 2.8% over three years, so most shareholders wouldn't be too disappointed. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
E. Mills is paid around the same as most CEOs of similar size companies.
We're not seeing great strides in earnings per share, and total returns were decent but not amazing in the last three years. We do not think the CEO pay is a problem, but it's probably fair to say that many shareholders would like to see improved performance, before any pay rise occurs. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Columbia Property Trust (free visualization of insider trades).
Important note: Columbia Property Trust may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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. Thank you for reading.
