In 2015 Bill Lenehan was appointed CEO of Four Corners Property Trust, Inc. (NYSE:FCPT). First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. 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 Bill Lenehan’s Compensation Compare With Similar Sized Companies?
According to our data, Four Corners Property Trust, Inc. has a market capitalization of US$2.0b, and paid its CEO total annual compensation worth US$2.7m over the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$525k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO total compensation was US$4.1m.
A first glance this seems like a real positive for shareholders, since Bill Lenehan is paid less than the average total compensation paid by similar sized companies. Though positive, it’s important we delve into the performance of the actual business.
The graphic below shows how CEO compensation at Four Corners Property Trust has changed from year to year.
Is Four Corners Property Trust, Inc. Growing?
Four Corners Property Trust, Inc. has reduced its earnings per share by an average of 23% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 12%.
Few shareholders would be pleased to read that earnings per share are lower over three years. There’s no doubt that the silver lining is that revenue is up. But it isn’t sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.
Has Four Corners Property Trust, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Four Corners Property Trust, Inc. for providing a total return of 64% over three years. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
It looks like Four Corners Property Trust, Inc. pays its CEO less than similar sized companies.
It’s well worth noting that while Bill Lenehan is paid less than most company leaders (at similar sized companies), there isn’t much EPS growth. Having said that, returns to shareholders have been great. So, while it would be nice to have EPS growth, on our analysis the CEO compensation is not an issue. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Four Corners Property Trust.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.