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Does STAG Industrial's (NYSE:STAG) CEO Salary Compare Well With The Performance Of The Company?

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·3 min read
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Ben Butcher became the CEO of STAG Industrial, Inc. (NYSE:STAG) in 2010, 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 look to assess whether the CEO is appropriately paid, considering recent funds from operations growth and investor returns for STAG Industrial.

See our latest analysis for STAG Industrial

Comparing STAG Industrial, Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that STAG Industrial, Inc. has a market capitalization of US$4.6b, and reported total annual CEO compensation of US$4.3m for the year to December 2019. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$650k.

On comparing similar companies from the same industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$5.2m. So it looks like STAG Industrial compensates Ben Butcher in line with the median for the industry. What's more, Ben Butcher holds US$1.9m worth of shares in the company in their own name.

Component

2019

2018

Proportion (2019)

Salary

US$650k

US$650k

15%

Other

US$3.7m

US$3.7m

85%

Total Compensation

US$4.3m

US$4.4m

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. Although there is a difference in how total compensation is set, STAG Industrial more or less reflects the market in terms of setting the salary. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

STAG Industrial, Inc.'s Growth

STAG Industrial, Inc.'s funds from operations (FFO) grew 26% per yearover the last three years. Its revenue is up 20% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has STAG Industrial, Inc. Been A Good Investment?

With a total shareholder return of 26% over three years, STAG Industrial, Inc. shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

As we touched on above, STAG Industrial, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But FFO growth over the last three years has been impressive, although the same cannot be said for shareholder returns. So considering these factors, we think the compensation is probably quite reasonable, but investor returns need a boost moving forward.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 2 which are significant) in STAG Industrial we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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.