The decent performance at Equity LifeStyle Properties, Inc. (NYSE:ELS) recently will please most shareholders as they go into the AGM coming up on 27 April 2021. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. We have prepared some analysis below and we show why we think CEO compensation looks decent with even the possibility for a raise.
Comparing Equity LifeStyle Properties, Inc.'s CEO Compensation With the industry
According to our data, Equity LifeStyle Properties, Inc. has a market capitalization of US$13b, and paid its CEO total annual compensation worth US$3.9m over the year to December 2020. We note that's an increase of 19% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$587k.
In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$7.3m. Accordingly, Equity LifeStyle Properties pays its CEO under the industry median. Moreover, Marguerite Nader also holds US$17m worth of Equity LifeStyle Properties stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Speaking on an industry level, nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. Although there is a difference in how total compensation is set, Equity LifeStyle Properties more or less reflects the market in terms of setting the salary. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Equity LifeStyle Properties, Inc.'s Growth Numbers
Equity LifeStyle Properties, Inc. has seen its funds from operations (FFO) increase by 7.2% per year over the past three years. Its revenue is up 4.8% over the last year.
We'd prefer higher revenue growth, but the modest improvement in FFO is good. So there are some positives here, but not enough to earn high praise. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Equity LifeStyle Properties, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Equity LifeStyle Properties, Inc. for providing a total return of 67% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
While the company seems to be headed in the right direction performance-wise, there's always room for improvement. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 2 warning signs for Equity LifeStyle Properties (1 is concerning!) that you should be aware of before investing here.
Important note: Equity LifeStyle Properties is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
If you’re looking to trade Equity LifeStyle Properties, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.