Is Retail Opportunity Investments Corp. (NASDAQ:ROIC) Excessively Paying Its CEO?

Stuart Tanz became the CEO of Retail Opportunity Investments Corp. (NASDAQ:ROIC) in 2009. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Retail Opportunity Investments

How Does Stuart Tanz’s Compensation Compare With Similar Sized Companies?

Our data indicates that Retail Opportunity Investments Corp. is worth US$2.1b, and total annual CEO compensation is US$4.9m. (This number is for the twelve months until December 2018). That’s less than last year. While we always look at total compensation first, we note that the salary component is less, at US$850k. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$3.5m.

As you can see, Stuart Tanz is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Retail Opportunity Investments Corp. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at Retail Opportunity Investments, below.

NasdaqGS:ROIC CEO Compensation, March 27th 2019
NasdaqGS:ROIC CEO Compensation, March 27th 2019

Is Retail Opportunity Investments Corp. Growing?

Retail Opportunity Investments Corp. has increased its earnings per share (EPS) by an average of 11% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 8.2%.

This demonstrates that the company has been improving recently. A good result. It’s also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.

Has Retail Opportunity Investments Corp. Been A Good Investment?

Given the total loss of 3.4% over three years, many shareholders in Retail Opportunity Investments Corp. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

We compared the total CEO remuneration paid by Retail Opportunity Investments Corp., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. While EPS is positive, we’d say shareholders would want better returns before the CEO is paid much more. Shareholders may want to check for free if Retail Opportunity Investments insiders are buying or selling shares.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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 editorial-team@simplywallst.com. 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.