Despite strong share price growth of 76% for Lexington Realty Trust (NYSE:LXP) over the last few years, earnings growth has been disappointing, which suggests something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 18 May 2021. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

View our latest analysis for Lexington Realty Trust

How Does Total Compensation For Will Eglin Compare With Other Companies In The Industry?

Our data indicates that Lexington Realty Trust has a market capitalization of US$3.5b, and total annual CEO compensation was reported as US$5.7m for the year to December 2020. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$765k.

On examining similar-sized companies in the industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$5.3m. From this we gather that Will Eglin is paid around the median for CEOs in the industry. Furthermore, Will Eglin directly owns US$33m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. Lexington Realty Trust sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Lexington Realty Trust's Growth

Funds from operations for Lexington Realty Trust are much the same as they were three years ago, albeit slightly lower. It achieved revenue growth of 5.1% over the last year.

A lack of FFO improvement is not good to see. And the modest revenue growth over 12 months isn't much comfort against the reduced FFO. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Lexington Realty Trust Been A Good Investment?

Boasting a total shareholder return of 76% over three years, Lexington Realty Trust has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 5 warning signs for Lexington Realty Trust you should be aware of, and 2 of them are potentially serious.

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.

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. 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.

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