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Is Mack-Cali Realty Corporation’s (NYSE:CLI) CEO Pay Justified?

Frank Brewer

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Mike DeMarco became the CEO of Mack-Cali Realty Corporation (NYSE:CLI) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Mack-Cali Realty

How Does Mike DeMarco’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Mack-Cali Realty Corporation has a market cap of US$2.1b, and is paying total annual CEO compensation of US$5.5m. (This figure is for the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$800k. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO compensation was US$3.4m.

It would therefore appear that Mack-Cali Realty Corporation pays Mike DeMarco more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at Mack-Cali Realty has changed over time.

NYSE:CLI CEO Compensation February 14th 19

Is Mack-Cali Realty Corporation Growing?

Over the last three years Mack-Cali Realty Corporation has grown its earnings per share (EPS) by an average of 77% per year (using a line of best fit). In the last year, its revenue is down -13%.

This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business. Shareholders might be interested in this free visualization of analyst forecasts.

Has Mack-Cali Realty Corporation Been A Good Investment?

Mack-Cali Realty Corporation has served shareholders reasonably well, with a total return of 25% over three years. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.

In Summary…

We compared total CEO remuneration at Mack-Cali Realty Corporation with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

However we must not forget that the EPS growth has been very strong over three years. We also think investors are doing ok, over the same time period. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn’t call the CEO pay problematic. Whatever your view on compensation, you might want to check if insiders are buying or selling Mack-Cali Realty shares (free trial).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.