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In 1995 David Simon was appointed CEO of Simon Property Group, Inc. (NYSE:SPG). This analysis aims first to contrast CEO compensation with other large companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does David Simon's Compensation Compare With Similar Sized Companies?
Our data indicates that Simon Property Group, Inc. is worth US$64b, and total annual CEO compensation is US$11m. (This figure is for the year to December 2018). That's a notable increase of 140% on last year. We think total compensation is more important but we note that the CEO salary is lower, at US$1.3m. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
That means David Simon receives fairly typical remuneration for the CEO of a large company. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Simon Property Group has changed from year to year.
Is Simon Property Group, Inc. Growing?
Simon Property Group, Inc. has increased its earnings per share (EPS) by an average of 10% a year, over the last three years (using a line of best fit). It achieved revenue growth of 1.8% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Shareholders might be interested in this free visualization of analyst forecasts.
Has Simon Property Group, Inc. Been A Good Investment?
Since shareholders would have lost about 2.4% over three years, some Simon Property Group, Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
David Simon is paid around the same as most CEOs of large companies.
We think that the EPS growth is very pleasing, but it's disappointing to see negative shareholder returns over three years. Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Simon Property Group.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 firstname.lastname@example.org. 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.