Shareholders Will Probably Hold Off On Increasing Equinix, Inc. (REIT)'s (NASDAQ:EQIX) CEO Compensation For The Time Being

By
Simply Wall St
Published
May 19, 2021
NasdaqGS:EQIX
Source: Shutterstock

Under the guidance of CEO Charles Meyers, Equinix, Inc. (REIT) (NASDAQ:EQIX) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 26 May 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for Equinix (REIT)

How Does Total Compensation For Charles Meyers Compare With Other Companies In The Industry?

According to our data, Equinix, Inc. (REIT) has a market capitalization of US$64b, and paid its CEO total annual compensation worth US$26m over the year to December 2020. Notably, that's an increase of 56% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.

For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$7.8m. Hence, we can conclude that Charles Meyers is remunerated higher than the industry median. Furthermore, Charles Meyers directly owns US$9.0m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary US$1.0m US$1.0m 4%
Other US$25m US$16m 96%
Total CompensationUS$26m US$17m100%

On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. A high-salary is usually a no-brainer when it comes to attracting the best executives, but Equinix (REIT) paid Charles Meyers a nominal salary to the CEO over the past 12 months, instead focusing on non-salary compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
NasdaqGS:EQIX CEO Compensation May 20th 2021

A Look at Equinix, Inc. (REIT)'s Growth Numbers

Equinix, Inc. (REIT) has seen its funds from operations (FFO) increase by 8.3% per year over the past three years. In the last year, its revenue is up 9.9%.

We'd prefer higher revenue growth, but we're happy with the modest FFO growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Equinix, Inc. (REIT) Been A Good Investment?

We think that the total shareholder return of 96%, over three years, would leave most Equinix, Inc. (REIT) shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Equinix (REIT) prefers rewarding its CEO through non-salary benefits. The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for Equinix (REIT) (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Equinix (REIT), if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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