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Does First Industrial Realty Trust's (NYSE:FR) CEO Salary Compare Well With The Performance Of The Company?

Simply Wall St
·4 min read

Peter Baccile has been the CEO of First Industrial Realty Trust, Inc. (NYSE:FR) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent funds from operations growth and investor returns for First Industrial Realty Trust.

View our latest analysis for First Industrial Realty Trust

How Does Total Compensation For Peter Baccile Compare With Other Companies In The Industry?

At the time of writing, our data shows that First Industrial Realty Trust, Inc. has a market capitalization of US$5.4b, and reported total annual CEO compensation of US$4.4m for the year to December 2019. That's just a smallish increase of 7.9% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$750k.

On comparing similar companies from the same industry with market caps ranging from US$4.0b to US$12b, we found that the median CEO total compensation was US$6.3m. This suggests that Peter Baccile is paid below the industry median. What's more, Peter Baccile holds US$2.2m worth of shares in the company in their own name.

Component

2019

2018

Proportion (2019)

Salary

US$750k

US$750k

17%

Other

US$3.6m

US$3.3m

83%

Total Compensation

US$4.4m

US$4.0m

100%

On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. According to our research, First Industrial Realty Trust has allocated a higher percentage of pay to salary in comparison to the wider industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

A Look at First Industrial Realty Trust, Inc.'s Growth Numbers

First Industrial Realty Trust, Inc. has seen its funds from operations (FFO) increase by 9.4% per year over the past three years. Its revenue is up 5.8% over the last year.

We'd prefer higher revenue growth, but it is good to see modest FFO growth. So there are some positives here, but not enough to earn high praise. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has First Industrial Realty Trust, Inc. Been A Good Investment?

Boasting a total shareholder return of 46% over three years, First Industrial Realty Trust, Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

As previously discussed, Peter is compensated less than what is normal for CEOs of companies of similar size, and which belong 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. Considering this fine result for investors, we believe CEO compensation to be apt.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 4 warning signs for First Industrial Realty Trust (of which 2 are a bit unpleasant!) 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.