Is Lexington Realty Trust (NYSE:LXP) Overpaying Its CEO?

In 2003 Will Eglin was appointed CEO of Lexington Realty Trust (NYSE:LXP). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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.

View our latest analysis for Lexington Realty Trust

How Does Will Eglin’s Compensation Compare With Similar Sized Companies?

Our data indicates that Lexington Realty Trust is worth US$2.7b, and total annual CEO compensation was reported as US$5.1m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$719k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$4.9m.

So Will Eglin receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

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

NYSE:LXP CEO Compensation, January 20th 2020
NYSE:LXP CEO Compensation, January 20th 2020

Is Lexington Realty Trust Growing?

Lexington Realty Trust has increased its earnings per share (EPS) by an average of 53% a year, over the last three years (using a line of best fit). In the last year, its revenue is down 20%.

This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. Shareholders might be interested in this free visualization of analyst forecasts.

Has Lexington Realty Trust Been A Good Investment?

With a total shareholder return of 25% over three years, Lexington Realty Trust shareholders would, in general, be reasonably content. 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…

Will Eglin is paid around the same as most CEOs of similar size companies.

We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. As a result of these considerations, I would suggest the CEO pay is reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Lexington Realty Trust (free visualization of insider trades).

Important note: Lexington Realty 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.

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.

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