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Is Mid-America Apartment Communities, Inc.'s (NYSE:MAA) CEO Overpaid Relative To Its Peers?

Simply Wall St

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In 2001 H. Bolton was appointed CEO of Mid-America Apartment Communities, Inc. (NYSE:MAA). This analysis aims first to contrast CEO compensation with other large companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Mid-America Apartment Communities

How Does H. Bolton's Compensation Compare With Similar Sized Companies?

Our data indicates that Mid-America Apartment Communities, Inc. is worth US$13b, and total annual CEO compensation is US$4.7m. (This figure is for the year to December 2018). That's actually a decrease on the year before. We think total compensation is more important but we note that the CEO salary is lower, at US$775k. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.

A first glance this seems like a real positive for shareholders, since H. Bolton is paid less than the average total compensation paid by other large companies. Though positive, it's important we delve into the performance of the actual business.

You can see, below, how CEO compensation at Mid-America Apartment Communities has changed over time.

NYSE:MAA CEO Compensation, May 1st 2019

Is Mid-America Apartment Communities, Inc. Growing?

On average over the last three years, Mid-America Apartment Communities, Inc. has shrunk earnings per share by 18% each year (measured with a line of best fit). In the last year, its revenue is up 2.8%.

Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has Mid-America Apartment Communities, Inc. Been A Good Investment?

Mid-America Apartment Communities, Inc. has generated a total shareholder return of 23% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

It looks like Mid-America Apartment Communities, Inc. pays its CEO less than the average at large companies.

Shareholders should note that compensation for H. Bolton is under the median of a group of large companies. However, the earnings per share are not moving in the right direction, and the returns to shareholders could have been better. There is room for improved company performance, but we don't see the CEO pay as a big issue here. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Mid-America Apartment Communities (free visualization of insider trades).

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

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.

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. Thank you for reading.