In 2012 Bob Sulentic was appointed CEO of CBRE Group, Inc. (NYSE:CBRE). This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. 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 Bob Sulentic's Compensation Compare With Similar Sized Companies?
According to our data, CBRE Group, Inc. has a market capitalization of US$15b, and paid its CEO total annual compensation worth US$10m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$998k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$12m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
So Bob Sulentic receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at CBRE Group, below.
Is CBRE Group, Inc. Growing?
On average over the last three years, CBRE Group, Inc. has grown earnings per share (EPS) by 24% each year (using a line of best fit). It achieved revenue growth of 12% over the last year.
This demonstrates that the company has been improving recently. A good result. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has CBRE Group, Inc. Been A Good Investment?
CBRE Group, Inc. has generated a total shareholder return of 29% over three years, so most shareholders would 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.
Bob Sulentic is paid around the same as most CEOs of large companies.
Shareholder returns could be better but shareholders would be pleased with the positive EPS growth. So upon reflection one could argue that the CEO pay is quite reasonable. On another note, we've spotted 2 warning signs for CBRE Group that investors should look into moving forward.
If you want to buy a stock that is better than CBRE Group, this free list of high return, low debt companies is a great place to look.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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