In 2014 Albert Behler was appointed CEO of Paramount Group, Inc. (NYSE:PGRE). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Albert Behler's Compensation Compare With Similar Sized Companies?
Our data indicates that Paramount Group, Inc. is worth US$3.4b, and total annual CEO compensation is US$9.8m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$1.1m. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.1m.
Thus we can conclude that Albert Behler receives more in total compensation than the median of a group of companies in the same market, and of similar size to Paramount Group, Inc.. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Paramount Group has changed from year to year.
Is Paramount Group, Inc. Growing?
Over the last three years Paramount Group, Inc. has grown its earnings per share (EPS) by an average of 3.0% per year (using a line of best fit). Its revenue is up 3.4% over last year.
I would argue that the improvement in revenue isn't particularly impressive, but it is good to see modest EPS growth. Considering these factors I'd say performance has been pretty decent, though not amazing. Shareholders might be interested in this free visualization of analyst forecasts.
Has Paramount Group, Inc. Been A Good Investment?
Given the total loss of 22% over three years, many shareholders in Paramount Group, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at Paramount Group, Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Shareholders may wish to consider further research. Although we don't think the CEO pay is too high, it is probably more on the generous side of things. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Paramount Group.
If you want to buy a stock that is better than Paramount Group, this free list of high return, low debt companies is a great place to look.
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