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Joe Margolis has been the CEO of Extra Space Storage Inc. (NYSE:EXR) since 2017. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Joe Margolis's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Extra Space Storage Inc. has a market cap of US$14b, and is paying total annual CEO compensation of US$4.4m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$750k. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
A first glance this seems like a real positive for shareholders, since Joe Margolis is paid less than the average total compensation paid by other large companies. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see a visual representation of the CEO compensation at Extrace Storage, below.
Is Extra Space Storage Inc. Growing?
On average over the last three years, Extra Space Storage Inc. has grown earnings per share (EPS) by 21% each year (using a line of best fit). It achieved revenue growth of 8.2% over the last year.
This demonstrates that the company has been improving recently. A good result. 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 Extra Space Storage Inc. Been A Good Investment?
With a total shareholder return of 31% over three years, Extra Space Storage 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.
It looks like Extra Space Storage Inc. pays its CEO less than the average at large companies. Many would consider this to indicate that the pay is modest since the business is growing. While some might be keen on seeing higher returns, our short analysis has not produced any evidence to suggest Joe Margolis is overcompensated.
Few would complain about reasonable CEO remuneration when the business is growing earnings per share. But for me, it's even better if insiders are also buying shares with their own cold, hard, cash. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Extrace Storage (free visualization of insider trades).
If you want to buy a stock that is better than Extrace Storage, this free list of high return, low debt companies is a great place to look.
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 email@example.com. 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.