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Lou Conforti has been the CEO of Washington Prime Group Inc. (NYSE:WPG) since 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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.
How Does Lou Conforti’s Compensation Compare With Similar Sized Companies?
Our data indicates that Washington Prime Group Inc. is worth US$805m, and total annual CEO compensation is US$4.8m. (This number is for the twelve months until December 2018). That’s actually a decrease on the year before. We think total compensation is more important but we note that the CEO salary is lower, at US$900k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.7m.
It would therefore appear that Washington Prime Group Inc. pays Lou Conforti more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Washington Prime Group has changed from year to year.
Is Washington Prime Group Inc. Growing?
On average over the last three years, Washington Prime Group Inc. has grown earnings per share (EPS) by 54% each year (using a line of best fit). Its revenue is down -2.4% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end. Shareholders might be interested in this free visualization of analyst forecasts.
Has Washington Prime Group Inc. Been A Good Investment?
Since shareholders would have lost about 52% over three years, some Washington Prime Group Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at Washington Prime Group Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. While EPS is positive, we’d say shareholders would want better returns before the CEO is paid much more. So you may want to check if insiders are buying Washington Prime Group shares with their own money (free access).
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 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.