Chris Constant has been the CEO of Getty Realty Corp. (NYSE:GTY) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Chris Constant’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Getty Realty Corp. has a market cap of US$1.3b, and is paying total annual CEO compensation of US$1.2m. (This number is for the twelve months until December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$485k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.4m.
Most shareholders would consider it a positive that Chris Constant takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at Getty Realty has changed from year to year.
Is Getty Realty Corp. Growing?
Over the last three years Getty Realty Corp. has shrunk its earnings per share by an average of 5.4% per year (measured with a line of best fit). Its revenue is up 13% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And while it’s good to see some good revenue growth recently, the growth isn’t really fast enough for me to put aside my concerns around earnings. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Getty Realty Corp. Been A Good Investment?
I think that the total shareholder return of 103%, over three years, would leave most Getty Realty Corp. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Getty Realty Corp. is currently paying its CEO below what is normal for companies of its size.
It’s well worth noting that while Chris Constant is paid less than most company leaders (at similar sized companies), there isn’t much EPS growth. Having said that, returns to shareholders have been great. So, while it would be nice to have EPS growth, on our analysis the CEO compensation is not an issue. Shareholders may want to check for free if Getty Realty insiders are buying or selling shares.
Important note: Getty Realty may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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If you spot an error that warrants correction, please contact the editor at email@example.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.