A Quick Analysis On Stratus Properties' (NASDAQ:STRS) CEO Salary

Beau Armstrong became the CEO of Stratus Properties Inc. (NASDAQ:STRS) in 1998, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Stratus Properties

Comparing Stratus Properties Inc.'s CEO Compensation With the industry

Our data indicates that Stratus Properties Inc. has a market capitalization of US$208m, and total annual CEO compensation was reported as US$1.5m for the year to December 2019. Notably, that's a decrease of 13% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$500k.

On examining similar-sized companies in the industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$1.5m. This suggests that Stratus Properties remunerates its CEO largely in line with the industry average. What's more, Beau Armstrong holds US$13m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 29% of total compensation represents salary and 71% is other remuneration. Stratus Properties pays out 32% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Stratus Properties Inc.'s Growth

Over the last three years, Stratus Properties Inc. has shrunk its earnings per share by 71% per year. In the last year, its revenue is down 55%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Stratus Properties Inc. Been A Good Investment?

Given the total shareholder loss of 13% over three years, many shareholders in Stratus Properties Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, Stratus Properties pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Stratus Properties (2 are significant!) that you should be aware of before investing here.

Switching gears from Stratus Properties, 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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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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