How Does Equity LifeStyle Properties' (NYSE:ELS) CEO Pay Compare With Company Performance?
Marguerite Nader became the CEO of Equity LifeStyle Properties, Inc. (NYSE:ELS) in 2013, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Equity LifeStyle Properties pays its CEO appropriately, considering its funds from operations growth and total shareholder returns.
Check out our latest analysis for Equity LifeStyle Properties
How Does Total Compensation For Marguerite Nader Compare With Other Companies In The Industry?
According to our data, Equity LifeStyle Properties, Inc. has a market capitalization of US$12b, and paid its CEO total annual compensation worth US$3.2m over the year to December 2019. Notably, that's a decrease of 22% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$575k.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$7.1m. Accordingly, Equity LifeStyle Properties pays its CEO under the industry median. Moreover, Marguerite Nader also holds US$14m worth of Equity LifeStyle Properties stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$575k | US$400k | 18% |
Other | US$2.7m | US$3.8m | 82% |
Total Compensation | US$3.2m | US$4.2m | 100% |
Talking in terms of the industry, salary represented approximately 15% of total compensation out of all the companies we analyzed, while other remuneration made up 85% of the pie. It's interesting to note that Equity LifeStyle Properties pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Equity LifeStyle Properties, Inc.'s Growth Numbers
Equity LifeStyle Properties, Inc.'s funds from operations (FFO) grew 6.9% per yearover the last three years. In the last year, its revenue is up 4.8%.
We would argue that the improvement in revenue is good, but isn't particularly impressive, but it is good to see modest FFO growth. So there are some positives here, but not enough to earn high praise. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Equity LifeStyle Properties, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Equity LifeStyle Properties, Inc. for providing a total return of 48% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
As we noted earlier, Equity LifeStyle Properties pays its CEO lower than the norm for similar-sized companies belonging to the same industry. In contrast, shareholder returns have been excellent over the past three years, and that’s certainly a promising trend to keep an eye on. So, considering these tasty returns, CEO compensation seems quite appropriate.
CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for Equity LifeStyle Properties (of which 1 makes us a bit uncomfortable!) that you should know about in order to have a holistic understanding of the stock.
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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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