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Is Camden Property Trust's (NYSE:CPT) CEO Paid Enough Relative To Peers?

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Simply Wall St
·4 min read
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Ric Campo became the CEO of Camden Property Trust (NYSE:CPT) in 1993. 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. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Camden Property Trust

How Does Ric Campo's Compensation Compare With Similar Sized Companies?

Our data indicates that Camden Property Trust is worth US$8.6b, and total annual CEO compensation was reported as US$4.1m for the year to December 2019. That's just a smallish increase of 1.1% on last year. We think total compensation is more important but we note that the CEO salary is lower, at US$566k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$7.6m.

Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Camden Property Trust. Speaking on an industry level, we can see that nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. Our data reveals that Camden Property Trust allocates salary in line with the wider market.

Most shareholders would consider it a positive that Ric Campo 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. You can see, below, how CEO compensation at Camden Property Trust has changed over time.

NYSE:CPT CEO Compensation April 17th 2020
NYSE:CPT CEO Compensation April 17th 2020

Is Camden Property Trust Growing?

On average over the last three years, Camden Property Trust has shrunk earnings per share by 38% each year (measured with a line of best fit). It achieved revenue growth of 7.9% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.

Has Camden Property Trust Been A Good Investment?

Camden Property Trust has generated a total shareholder return of 13% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

It appears that Camden Property Trust remunerates its CEO below most similar sized companies.

Ric Campo is remunerated more modestly than is a normal at similar sized companies. But the business isn't growing earnings per share, and the returns to shareholders haven't been wonderful. So while shareholders shouldn't be overly concerned about CEO compensation, we suspect most would prefer see improved performance, before increasing pay. On another note, we've spotted 4 warning signs for Camden Property Trust that investors should look into moving forward.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.

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. Thank you for reading.