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Here's What We Think About Lexington Realty Trust's (NYSE:LXP) CEO Pay

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Simply Wall St
·4 min read
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Will Eglin has been the CEO of Lexington Realty Trust (NYSE:LXP) since 2003, 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 funds from operations growth and investor returns for Lexington Realty Trust.

View our latest analysis for Lexington Realty Trust

How Does Total Compensation For Will Eglin Compare With Other Companies In The Industry?

At the time of writing, our data shows that Lexington Realty Trust has a market capitalization of US$3.0b, and reported total annual CEO compensation of US$5.7m for the year to December 2019. Notably, that's an increase of 12% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$750k.

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$5.0m. So it looks like Lexington Realty Trust compensates Will Eglin in line with the median for the industry. Moreover, Will Eglin also holds US$27m worth of Lexington Realty Trust stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2019

2018

Proportion (2019)

Salary

US$750k

US$719k

13%

Other

US$5.0m

US$4.4m

87%

Total Compensation

US$5.7m

US$5.1m

100%

On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. In Lexington Realty Trust's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

A Look at Lexington Realty Trust's Growth Numbers

Funds from operations for Lexington Realty Trust are much the same as they were three years ago, albeit slightly lower. The trailing twelve months of revenue was pretty much the same as the prior period.

The lack of FFO growth is certainly unimpressive. And the flat revenue hardly impresses. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Lexington Realty Trust Been A Good Investment?

Lexington Realty Trust has served shareholders reasonably well, with a total return of 21% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

As we noted earlier, Lexington Realty Trust pays its CEO in line with similar-sized companies belonging to the same industry. Lexington Realty Trust has had a tough time in recent years, with declining FFO growth, and although shareholder returns are stable, they are hardly worth celebrating. These figures do not go well against CEO compensation, which is more or less equal to the industry median. Considering all of this, we can't say the CEO is underpaid, and moving forward shareholders will likely want to see higher growth to justify any raise.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 5 warning signs for Lexington Realty Trust (of which 2 are significant!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Lexington Realty Trust, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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.