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Beau Armstrong became the CEO of Stratus Properties Inc. (NASDAQ:STRS) in 1998. 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. 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 Beau Armstrong’s Compensation Compare With Similar Sized Companies?
According to our data, Stratus Properties Inc. has a market capitalization of US$233m, and pays its CEO total annual compensation worth US$1.8m. (This number is for the twelve months until December 2018). That’s just a smallish increase of 3.0% on last year. While we always look at total compensation first, we note that the salary component is less, at US$492k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$1.1m.
It would therefore appear that Stratus Properties Inc. pays Beau Armstrong 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.
You can see a visual representation of the CEO compensation at Stratus Properties, below.
Is Stratus Properties Inc. Growing?
Over the last three years Stratus Properties Inc. has shrunk its earnings per share by an average of 24% per year (measured with a line of best fit). It achieved revenue growth of 16% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don’t have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Stratus Properties Inc. Been A Good Investment?
Boasting a total shareholder return of 61% over three years, Stratus Properties Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared total CEO remuneration at Stratus Properties Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
On the other hand, returns have been good, so the company is doing something right. Given this situation we doubt shareholders are particularly concerned about the CEO compensation. So you may want to check if insiders are buying Stratus Properties shares with their own money (free access).
If you want to buy a stock that is better than Stratus Properties, this free list of high return, low debt companies is a great place to look.
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.