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John Winfield has been the CEO of The InterGroup Corporation (NASDAQ:INTG) since 1987. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does John Winfield’s Compensation Compare With Similar Sized Companies?
According to our data, The InterGroup Corporation has a market capitalization of US$74m, and pays its CEO total annual compensation worth US$919k. (This number is for the twelve months until 2018). While we always look at total compensation first, we note that the salary component is less, at US$844k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$299k.
As you can see, John Winfield is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean The InterGroup Corporation is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at InterGroup has changed from year to year.
Is The InterGroup Corporation Growing?
The InterGroup Corporation has increased its earnings per share (EPS) by an average of 86% a year, over the last three years (using a line of best fit). Its revenue is up 6.7% over last year.
This demonstrates that the company has been improving recently. A good result. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has The InterGroup Corporation Been A Good Investment?
The InterGroup Corporation has served shareholders reasonably well, with a total return of 27% 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.
We examined the amount The InterGroup Corporation pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. Looking at the same time period, we think that the shareholder returns are respectable. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we’d recommend further research on management. Whatever your view on compensation, you might want to check if insiders are buying or selling InterGroup shares (free trial).
Important note: InterGroup 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.