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Is Mack-Cali Realty Corporation's (NYSE:CLI) CEO Paid At A Competitive Rate?

Mike DeMarco has been the CEO of Mack-Cali Realty Corporation (NYSE:CLI) since 2015. 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. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Mack-Cali Realty

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

According to our data, Mack-Cali Realty Corporation has a market capitalization of US$1.6b, and paid its CEO total annual compensation worth US$6.1m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$800k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.6m.

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. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Mack-Cali Realty, below.

NYSE:CLI CEO Compensation, March 18th 2020
NYSE:CLI CEO Compensation, March 18th 2020

Is Mack-Cali Realty Corporation Growing?

On average over the last three years, Mack-Cali Realty Corporation has grown earnings per share (EPS) by 64% each year (using a line of best fit). It saw its revenue drop 4.4% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end. You might want to check this free visual report on analyst forecasts for future earnings.

Has Mack-Cali Realty Corporation Been A Good Investment?

Since shareholders would have lost about 25% over three years, some Mack-Cali Realty Corporation shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared the total CEO remuneration paid by Mack-Cali Realty Corporation, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. On the other hand returns to investors over the same period have probably disappointed many. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Taking a breather from CEO compensation, we've spotted 4 warning signs for Mack-Cali Realty (of which 1 is a bit concerning!) you should know about in order to have a holistic understanding of the stock.

If you want to buy a stock that is better than Mack-Cali Realty, this free list of high return, low debt companies is a great place to look.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.

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.

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