Bill Stein has been the CEO of Digital Realty Trust, Inc. (NYSE:DLR) since 2014. This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Digital Realty Trust
How Does Bill Stein’s Compensation Compare With Similar Sized Companies?
Our data indicates that Digital Realty Trust, Inc. is worth US$27b, and total annual CEO compensation was reported as US$13m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$1.1m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts – even though some are quite a bit bigger than others).
That means Bill Stein receives fairly typical remuneration for the CEO of a large company. 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.
You can see a visual representation of the CEO compensation at Digital Realty Trust, below.
Is Digital Realty Trust, Inc. Growing?
Digital Realty Trust, Inc. has reduced its earnings per share by an average of 25% a year, over the last three years (measured with a line of best fit). Its revenue is up 5.8% over 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. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Digital Realty Trust, Inc. Been A Good Investment?
With a total shareholder return of 28% over three years, Digital Realty Trust, Inc. shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary…
Bill Stein is paid around the same as most CEOs of large 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’re not saying the CEO pay is too generous, but one might argue that the company should improve returns to shareholders before increasing it. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Digital Realty Trust.
If you want to buy a stock that is better than Digital Realty Trust, this free list of high return, low debt companies is a great place to look.
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