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W. Baird has been the CEO of Terreno Realty Corporation (NYSE:TRNO) since 2010. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does W. Baird’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Terreno Realty Corporation has a market cap of US$2.7b, and is paying total annual CEO compensation of US$2.1m. (This number is for the twelve months until December 2018). That’s a notable increase of 35% on last year. While we always look at total compensation first, we note that the salary component is less, at US$791k. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO total compensation was US$5.1m.
Most shareholders would consider it a positive that W. Baird takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Terreno Realty has changed from year to year.
Is Terreno Realty Corporation Growing?
Over the last three years Terreno Realty Corporation has grown its earnings per share (EPS) by an average of 53% per year (using a line of best fit). In the last year, its revenue is up 14%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Terreno Realty Corporation Been A Good Investment?
Boasting a total shareholder return of 107% over three years, Terreno Realty Corporation has done well by shareholders. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
Terreno Realty Corporation is currently paying its CEO below what is normal for companies of its size. Many would consider this to indicate that the pay is modest since the business is growing. And given most shareholders are probably very happy with recent returns, you might even think that W. Baird deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. But it is even better if company insiders are also buying shares with their own money. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Terreno Realty (free visualization of insider trades).
Important note: Terreno 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.
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 firstname.lastname@example.org. 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.