Should You Worry About SL Green Realty Corp.’s (NYSE:SLG) CEO Pay?

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Marc Holliday has been the CEO of SL Green Realty Corp. (NYSE:SLG) since 2004. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for SL Green Realty

How Does Marc Holliday’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that SL Green Realty Corp. has a market cap of US$7.6b, and is paying total annual CEO compensation of US$13m. (This is based on the year to December 2018). That’s less than last year. We think total compensation is more important but we note that the CEO salary is lower, at US$1.3m. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$6.9m.

As you can see, Marc Holliday is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean SL Green Realty Corp. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at SL Green Realty, below.

NYSE:SLG CEO Compensation, June 20th 2019
NYSE:SLG CEO Compensation, June 20th 2019

Is SL Green Realty Corp. Growing?

Over the last three years SL Green Realty Corp. has shrunk its earnings per share by an average of 6.5% per year (measured with a line of best fit). Its revenue is down -16% over last year.

Unfortunately, earnings per share have trended lower over the last three years. 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. You might want to check this free visual report on analyst forecasts for future earnings.

Has SL Green Realty Corp. Been A Good Investment?

Given the total loss of 7.7% over three years, many shareholders in SL Green Realty Corp. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

We examined the amount SL Green Realty Corp. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

We think many shareholders would be underwhelmed with the business growth over the last three years.

Arguably worse, investors are without a positive return for the last three years. This analysis suggests to us that the CEO is paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling SL Green Realty shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.