Does Duke Realty Corporation's (NYSE:DRE) CEO Salary Reflect Performance?

August 26, 2019

In 2016 Jim Connor was appointed CEO of Duke Realty Corporation (NYSE:DRE). This analysis aims first to contrast CEO compensation with other large companies. 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 method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Duke Realty

How Does Jim Connor's Compensation Compare With Similar Sized Companies?

Our data indicates that Duke Realty Corporation is worth US$12b, and total annual CEO compensation is US$6.9m. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$846k. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

A first glance this seems like a real positive for shareholders, since Jim Connor is paid less than the average total compensation paid by other large companies. However, before we heap on the praise, we should delve deeper to understand business performance.

You can see a visual representation of the CEO compensation at Duke Realty, below.

NYSE:DRE CEO Compensation, August 27th 2019

Is Duke Realty Corporation Growing?

On average over the last three years, Duke Realty Corporation has grown earnings per share (EPS) by 6.3% each year (using a line of best fit). Its revenue is up 25% over last year.

I would argue that the modest growth in revenue is a notable positive. And the modest growth in earnings per share isn't bad, either. So while we'd stop just short of calling this a top performer, but we think it is well worth watching.

Has Duke Realty Corporation Been A Good Investment?

Duke Realty Corporation has served shareholders reasonably well, with a total return of 32% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

It looks like Duke Realty Corporation pays its CEO less than the average at large companies.

Jim Connor receives relatively low remuneration compared to other large companies. But the company isn't exactly firing on all cylinders, from my perspective. But on this analysis I see no issue with the CEO compensation. So you may want to check if insiders are buying Duke Realty shares with their own money (free access).

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

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mitchell_lawler

Nvidia's (NVDA) record profit had a US$7.8 billion catch. That chunk came from betting on its own customers, not from selling its chips.

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Jake_Merritt19h

The circularity worth examining is not the mark-to-market line. A large and growing share of Nvidia's revenue comes from companies funded by venture capital, and Nvidia participates in some of those rounds. That is the loop. The paper gains are just an accounting reflection of it, so focusing on them means arguing about the mirror rather than the room.

nadia_y3d8i19h

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