Shareholders May Not Be So Generous With Empire State Realty Trust, Inc.'s (NYSE:ESRT) CEO Compensation And Here's Why

Key Insights

• Empire State Realty Trust will host its Annual General Meeting on 9th of May
• CEO Tony Malkin's total compensation includes salary of US$849.7k
• The overall pay is 183% above the industry average
• Over the past three years, Empire State Realty Trust's FFO grew by 19% per year and over the past three years, the total loss to shareholders 17%

The underwhelming share price performance of Empire State Realty Trust, Inc. (NYSE:ESRT) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 9th of May. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for Empire State Realty Trust

How Does Total Compensation For Tony Malkin Compare With Other Companies In The Industry?

Our data indicates that Empire State Realty Trust, Inc. has a market capitalization of US$2.5b, and total annual CEO compensation was reported as US$9.0m for the year to December 2023. That's a fairly small increase of 6.8% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$850k.

For comparison, other companies in the American REITs industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$3.2m. Hence, we can conclude that Tony Malkin is remunerated higher than the industry median. What's more, Tony Malkin holds US$6.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	US$850k	US$810k	9%
Other	US$8.1m	US$7.6m	91%
Total Compensation	US$9.0m	US$8.4m	100%

On an industry level, roughly 24% of total compensation represents salary and 76% is other remuneration. Empire State Realty Trust pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Empire State Realty Trust, Inc.'s Growth Numbers

Empire State Realty Trust, Inc.'s funds from operations (FFO) grew 19% per yearover the last three years. Its revenue is up 6.7% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Empire State Realty Trust, Inc. Been A Good Investment?

Since shareholders would have lost about 17% over three years, some Empire State Realty Trust, Inc. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Empire State Realty Trust that investors should think about before committing capital to this stock.

Switching gears from Empire State Realty Trust, 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.