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Is Corporate Office Properties Trust's (NYSE:OFC) CEO Pay Fair?

Simply Wall St

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Steve Budorick became the CEO of Corporate Office Properties Trust (NYSE:OFC) in 2016. 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.

See our latest analysis for Corporate Office Properties Trust

How Does Steve Budorick's Compensation Compare With Similar Sized Companies?

Our data indicates that Corporate Office Properties Trust is worth US$3.2b, and total annual CEO compensation is US$3.5m. (This is based on the year to December 2018). We note that's an increase of 23% above last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$641k. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.3m.

A first glance this seems like a real positive for shareholders, since Steve Budorick is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.

You can see, below, how CEO compensation at Corporate Office Properties Trust has changed over time.

NYSE:OFC CEO Compensation, May 30th 2019

Is Corporate Office Properties Trust Growing?

Corporate Office Properties Trust has reduced its earnings per share by an average of 12% a year, over the last three years (measured with a line of best fit). It saw its revenue drop -8.8% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has Corporate Office Properties Trust Been A Good Investment?

With a total shareholder return of 16% over three years, Corporate Office Properties Trust shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

It appears that Corporate Office Properties Trust remunerates its CEO below most similar sized companies.

Steve Budorick is remunerated more modestly than is a normal at similar sized companies. But the company lacks earnings per share growth, and returns to shareholders are less than stellar. There is room for improved company performance, but we don't see the CEO pay as a big issue here. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Corporate Office Properties Trust.

If you want to buy a stock that is better than Corporate Office Properties Trust, this free list of high return, low debt companies is a great place to look.

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.