In 2014 Chris Marr was appointed CEO of CubeSmart (NYSE:CUBE). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.
How Does Chris Marr’s Compensation Compare With Similar Sized Companies?
Our data indicates that CubeSmart is worth US$6.8b, and total annual CEO compensation was reported as US$4.1m for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$715k. 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 selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.8m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
You can see a visual representation of the CEO compensation at CubeSmart, below.
Is CubeSmart Growing?
CubeSmart has increased its earnings per share (EPS) by an average of 25% a year, over the last three years (using a line of best fit). Its revenue is up 7.2% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably.
Has CubeSmart Been A Good Investment?
Boasting a total shareholder return of 48% over three years, CubeSmart has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
It looks like CubeSmart pays its CEO less than similar sized companies.
Considering the underlying business is growing earnings, this would suggest the pay is modest. The strong history of shareholder returns might even have some thinking that Chris Marr deserves a raise! It is relatively rare to see a modestly paid CEO when performance is so impressive. But it is even better if company insiders are also buying shares with their own money. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling CubeSmart (free visualization of insider trades).
Important note: CubeSmart 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.
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