In 2012 Tim Naughton was appointed CEO of AvalonBay Communities Inc (NYSE:AVB). This analysis aims first to contrast CEO compensation with other large companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Tim Naughton’s Compensation Compare With Similar Sized Companies?
According to our data, AvalonBay Communities Inc has a market capitalization of US$24.6b, and pays its CEO total annual compensation worth US$8m. That’s a notable increase of 18% on last year. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO compensation was US$11m.
So Tim Naughton is paid around the average of the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at AvalonBay Communities has changed over time.
Is AvalonBay Communities Inc Growing?
Over the last three years AvalonBay Communities Inc has grown its earnings per share (EPS) by an average of 4.5% per year. It achieved revenue growth of 9.5% over the last year.
I would argue that the improvement in revenue isn’t particularly impressive, but I’m happy with the modest EPS growth. Considering these factors I’d say performance has been pretty decent, though not amazing.
It could be important to check this free visual depiction of what analysts expect for the future.
Has AvalonBay Communities Inc Been A Good Investment?
With a total shareholder return of 12% over three years, AvalonBay Communities Inc 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.
Tim Naughton is paid around what is normal the leaders of larger companies.
The company isn’t showing particularly great growth, and shareholder turns haven’t been particularly inspiring in the last few years. But we don’t think the CEO compensation is a problem. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling AvalonBay Communities Inc (free visualization of insider trades).
Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.