Lou Conforti has been the CEO of Washington Prime Group Inc. (NYSE:WPG) since 2016. 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Lou Conforti’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Washington Prime Group Inc. has a market cap of US$684m, and reported total annual CEO compensation of US$4.8m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$900k. 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$400m to US$1.6b. The median total CEO compensation was US$2.6m.
It would therefore appear that Washington Prime Group Inc. pays Lou Conforti more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Washington Prime Group has changed from year to year.
Is Washington Prime Group Inc. Growing?
Over the last three years Washington Prime Group Inc. has shrunk its earnings per share by an average of 1.4% per year (measured with a line of best fit). Its revenue is down 5.8% over last year.
The lack of earnings per share growth in the last three years is unimpressive. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Washington Prime Group Inc. Been A Good Investment?
With a three year total loss of 45%, Washington Prime Group Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
We compared the total CEO remuneration paid by Washington Prime Group Inc., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us. Arguably worse, investors are without a positive return for the last three years. This analysis suggests to us that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Washington Prime Group.
If you want to buy a stock that is better than Washington Prime Group, this free list of high return, low debt companies is a great place to look.
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