Paul Smithers became the CEO of Innovative Industrial Properties, Inc. (NYSE:IIPR) in 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Paul Smithers's Compensation Compare With Similar Sized Companies?
According to our data, Innovative Industrial Properties, Inc. has a market capitalization of US$926m, and paid its CEO total annual compensation worth US$1.1m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$360k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.6m.
Most shareholders would consider it a positive that Paul Smithers takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see, below, how CEO compensation at Innovative Industrial Properties has changed over time.
Is Innovative Industrial Properties, Inc. Growing?
Innovative Industrial Properties, Inc. has increased its earnings per share (EPS) by an average of 174% a year, over the last three years (using a line of best fit). It achieved revenue growth of 159% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Innovative Industrial Properties, Inc. Been A Good Investment?
Boasting a total shareholder return of 369% over three years, Innovative Industrial Properties, Inc. has done well by shareholders. 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.
It appears that Innovative Industrial Properties, Inc. remunerates its CEO below most similar sized companies.
Many would consider this to indicate that the pay is modest since the business is growing. The strong history of shareholder returns might even have some thinking that Paul Smithers deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. Shareholders may want to check for free if Innovative Industrial Properties insiders are buying or selling shares.
Important note: Innovative Industrial 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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. Thank you for reading.