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Does City Office REIT Inc’s (NYSE:CIO) CEO Pay Reflect Performance?

In 2014 Jamie Farrar was appointed CEO of City Office REIT Inc (NYSE:CIO). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for City Office REIT

How Does Jamie Farrar’s Compensation Compare With Similar Sized Companies?

Our data indicates that City Office REIT Inc is worth US$423m, and total annual CEO compensation is US$1.2m. (This figure is for the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$325k. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO compensation was US$1.6m.

So Jamie Farrar is paid around the average of 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, below, how CEO compensation at City Office REIT has changed over time.

NYSE:CIO CEO Compensation November 30th 18

Is City Office REIT Inc Growing?

On average over the last three years, City Office REIT Inc has grown earnings per share (EPS) by 123% each year. Its revenue is up 31% over last year.

This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business.

It could be important to check this free visual depiction of what analysts expect for the future.

Has City Office REIT Inc Been A Good Investment?

With a total shareholder return of 19% over three years, City Office REIT Inc shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary…

Jamie Farrar is paid around what is normal the leaders of comparable size companies.

We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. So considering these factors, we think the CEO pay is probably quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling City Office REIT shares (free trial).

Or you might prefer this data-rich interactive visualization of historic revenue and earnings.

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 editorial-team@simplywallst.com.