The performance at W. P. Carey Inc. (NYSE:WPC) has been quite strong recently and CEO Jason Fox has played a role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 17 June 2021. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.
How Does Total Compensation For Jason Fox Compare With Other Companies In The Industry?
At the time of writing, our data shows that W. P. Carey Inc. has a market capitalization of US$14b, and reported total annual CEO compensation of US$7.4m for the year to December 2020. That's a fairly small increase of 7.0% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$800k.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$7.8m. From this we gather that Jason Fox is paid around the median for CEOs in the industry. Moreover, Jason Fox also holds US$37m worth of W. P. Carey stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. It's interesting to note that W. P. Carey allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at W. P. Carey Inc.'s Growth Numbers
Over the past three years, W. P. Carey Inc. has seen its funds from operations (FFO) grow by 17% per year. In the last year, its revenue is up 1.8%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 W. P. Carey Inc. Been A Good Investment?
We think that the total shareholder return of 38%, over three years, would leave most W. P. Carey Inc. shareholders smiling. 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.
Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for W. P. Carey (1 shouldn't be ignored!) that you should be aware of before investing here.
Switching gears from W. P. Carey, 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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