David Helfand became the CEO of Equity Commonwealth (NYSE:EQC) in 2014. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does David Helfand’s Compensation Compare With Similar Sized Companies?
According to our data, Equity Commonwealth has a market capitalization of US$4.0b, and pays its CEO total annual compensation worth US$5.7m. (This number is for the twelve months until December 2017). While we always look at total compensation first, we note that the salary component is less, at US$637k. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO compensation was US$4.6m.
So David Helfand receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Equity Commonwealth has changed from year to year.
Is Equity Commonwealth Growing?
On average over the last three years, Equity Commonwealth has grown earnings per share (EPS) by 20% each year (using a line of best fit). It saw its revenue drop -42% over the last year.
This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. Shareholders might be interested in this free visualization of analyst forecasts.
Has Equity Commonwealth Been A Good Investment?
Boasting a total shareholder return of 33% over three years, Equity Commonwealth has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
David Helfand is paid around the same as most CEOs of similar size companies.
The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue the CEO compensation is quite modest, if you consider company performance! Whatever your view on compensation, you might want to check if insiders are buying or selling Equity Commonwealth shares (free trial).
If you want to buy a stock that is better than Equity Commonwealth, this free list of high return, low debt companies is a great place to look.
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