In 2011 David Lesser was appointed CEO of Power REIT (NYSEMKT:PW). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. 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 David Lesser’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Power REIT has a market cap of US$17m, and reported total annual CEO compensation of US$241k for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at . Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$523k.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it’s important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at Power REIT, below.
Is Power REIT Growing?
Over the last three years Power REIT has grown its earnings per share (EPS) by an average of 67% per year (using a line of best fit). It achieved revenue growth of 3.0% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions. Although we don’t have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Power REIT Been A Good Investment?
Power REIT has served shareholders reasonably well, with a total return of 30% over three years. 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.
It appears that Power REIT remunerates its CEO below most similar sized companies.
Since the business is growing, many would argue this suggests the pay is modest. While some might be keen on seeing higher returns, our short analysis has not produced any evidence to suggest David Lesser is overcompensated. Few would complain about reasonable CEO remuneration when the business is growing earnings per share. It would be an additional positive if insiders are buying shares. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Power REIT (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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