Scott Schaeffer has been the CEO of Independence Realty Trust, Inc. (NYSE:IRT) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Independence Realty Trust.
Comparing Independence Realty Trust, Inc.'s CEO Compensation With the industry
Our data indicates that Independence Realty Trust, Inc. has a market capitalization of US$1.1b, and total annual CEO compensation was reported as US$3.9m for the year to December 2019. We note that's an increase of 8.9% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$700k.
In comparison with other companies in the industry with market capitalizations ranging from US$400m to US$1.6b, the reported median CEO total compensation was US$3.9m. This suggests that Independence Realty Trust remunerates its CEO largely in line with the industry average. Furthermore, Scott Schaeffer directly owns US$4.6m worth of shares in the company, implying that they are deeply invested in the company's success.
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. It's interesting to note that Independence Realty Trust pays out a greater portion of remuneration through salary, compared to the industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Independence Realty Trust, Inc.'s Growth Numbers
Independence Realty Trust, Inc. has seen its earnings per share (EPS) increase by 53% a year over the past three years. In the last year, its revenue is up 3.6%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Independence Realty Trust, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Independence Realty Trust, Inc. for providing a total return of 43% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
As we touched on above, Independence Realty Trust, 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. Few would be critical of the leadership, since returns have been juicy and earnings are moving in the right direction. Indeed, many might consider that Scott is compensated rather modestly, given the solid company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 5 warning signs (and 1 which can't be ignored) in Independence Realty Trust we think you should know about.
Important note: Independence Realty Trust is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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.
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