W. Baird became the CEO of Terreno Realty Corporation (NYSE:TRNO) in 2010. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does W. Baird’s Compensation Compare With Similar Sized Companies?
According to our data, Terreno Realty Corporation has a market capitalization of US$3.3b, and pays its CEO total annual compensation worth US$2.1m. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$791k. 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$5.1m.
A first glance this seems like a real positive for shareholders, since W. Baird is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Terreno Realty has changed over time.
Is Terreno Realty Corporation Growing?
Terreno Realty Corporation has increased its earnings per share (EPS) by an average of 48% a year, over the last three years (using a line of best fit). It achieved revenue growth of 12% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business.
Has Terreno Realty Corporation Been A Good Investment?
Most shareholders would probably be pleased with Terreno Realty Corporation for providing a total return of 106% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Terreno Realty Corporation is currently paying its CEO below what is normal for companies of its size. Considering the underlying business is growing earnings, this would suggest the pay is modest. The strong history of shareholder returns might even have some thinking that W. Baird deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. It would be even more positive if company insiders are buying shares. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Terreno Realty (free visualization of insider trades).
Important note: Terreno Realty 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.
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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.