Is Franklin Street Properties Corp. (NYSEMKT:FSP) Overpaying Its CEO?
In 2002 George Carter was appointed CEO of Franklin Street Properties Corp. (NYSEMKT:FSP). 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Franklin Street Properties
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$918m, and reported total annual CEO compensation of US$306k for the year to December 2018. It is worth noting that the CEO compensation consists almost entirely of the salary, worth US$300k. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO total compensation was US$2.6m.
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. Though positive, it's important we delve into the performance of the actual business.
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 grown earnings per share (EPS) by 2.1% each year (using a line of best fit). It achieved revenue growth of 1.9% over the last year.
I'm not particularly impressed by the revenue growth, but the modest improvement in EPS is good. Considering these factors I'd say performance has been pretty decent, though not amazing. 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?
Given the total loss of 22% over three years, many shareholders in Franklin Street Properties Corp. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
It looks like Franklin Street Properties Corp. pays its CEO less than similar sized companies.
George Carter receives relatively low remuneration compared to similar sized companies. But the company isn't exactly firing on all cylinders, and returns over three years are not good. I am not concerned by the CEO compensation, but it would be good to see improved performance before pay increases. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Franklin Street Properties.
Important note: Franklin Street Properties may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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