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In 2002 George Carter was appointed CEO of Franklin Street Properties Corp. (NYSEMKT:FSP). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does George Carter's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Franklin Street Properties Corp. has a market cap of US$814m, and is paying total annual CEO compensation of US$306k. (This is based on the year to December 2018). That's below the compensation, last year. Notably, the salary of US$300k is the vast majority of the CEO compensation. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.7m.
A first glance this seems like a real positive for shareholders, since George Carter is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see a visual representation of the CEO compensation at Franklin Street Properties, below.
Is Franklin Street Properties Corp. Growing?
On average over the last three years, Franklin Street Properties Corp. has shrunk earnings per share by 51% each year (measured with a line of best fit). In the last year, its revenue is up 1.4%.
Unfortunately, earnings per share have trended lower over the last three years. The fairly low revenue growth fails to impress given that the earnings per share is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Franklin Street Properties Corp. Been A Good Investment?
Since shareholders would have lost about 25% over three years, some Franklin Street Properties Corp. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
It looks like Franklin Street Properties Corp. pays its CEO less than similar sized companies.
Shareholders should note that compensation for George Carter is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. Considering all these factors, we'd stop short of saying the CEO pay is too high, but we don't think shareholders would want to see a pay rise before business performance improves. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Franklin Street Properties.
If you want to buy a stock that is better than Franklin Street Properties, this free list of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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. Thank you for reading.