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What Can We Learn About Extra Space Storage's (NYSE:EXR) CEO Compensation?

Simply Wall St
·4 min read

Joe Margolis has been the CEO of Extra Space Storage Inc. (NYSE:EXR) since 2017, 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 Extra Space Storage.

See our latest analysis for Extra Space Storage

How Does Total Compensation For Joe Margolis Compare With Other Companies In The Industry?

According to our data, Extra Space Storage Inc. has a market capitalization of US$13b, and paid its CEO total annual compensation worth US$6.3m over the year to December 2019. We note that's an increase of 42% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$850k.

On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$7.2m. So it looks like Extra Space Storage compensates Joe Margolis in line with the median for the industry. Furthermore, Joe Margolis directly owns US$14m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2019

2018

Proportion (2019)

Salary

US$850k

US$750k

14%

Other

US$5.4m

US$3.7m

86%

Total Compensation

US$6.3m

US$4.4m

100%

Speaking on an industry level, nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. Although there is a difference in how total compensation is set, Extra Space Storage more or less reflects the market in terms of setting the salary. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

A Look at Extra Space Storage Inc.'s Growth Numbers

Extra Space Storage Inc. has seen its earnings per share (EPS) increase by 4.3% a year over the past three years. In the last year, its revenue is up 6.8%.

We'd prefer higher revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. 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 Extra Space Storage Inc. Been A Good Investment?

Most shareholders would probably be pleased with Extra Space Storage Inc. for providing a total return of 48% 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.

To Conclude...

As previously discussed, Joe is compensated close to the median for companies of its size, and which belong to the same industry. However, the company's earnings growth numbers over the last three years is not that impressive. At the same time, shareholder returns have remained strong over the same period. We would like to see EPS growth from the business, although we wouldn't say the CEO compensation is high.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Extra Space Storage that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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.