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Is Monmouth Real Estate Investment Corporation's (NYSE:MNR) CEO Pay Justified?

Simply Wall St

Michael Landy became the CEO of Monmouth Real Estate Investment Corporation (NYSE:MNR) in 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Monmouth Real Estate Investment

How Does Michael Landy's Compensation Compare With Similar Sized Companies?

According to our data, Monmouth Real Estate Investment Corporation has a market capitalization of US$1.5b, and paid its CEO total annual compensation worth US$1.5m over the year to September 2018. While we always look at total compensation first, we note that the salary component is less, at US$788k. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO total compensation was US$3.9m.

A first glance this seems like a real positive for shareholders, since Michael Landy is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.

The graphic below shows how CEO compensation at Monmouth Real Estate Investment has changed from year to year.

NYSE:MNR CEO Compensation, December 6th 2019

Is Monmouth Real Estate Investment Corporation Growing?

Over the last three years Monmouth Real Estate Investment Corporation has shrunk its earnings per share by an average of 35% per year (measured with a line of best fit). In the last year, its revenue is up 14%.

Few shareholders would be pleased to read that earnings per share are lower over three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.

Has Monmouth Real Estate Investment Corporation Been A Good Investment?

Monmouth Real Estate Investment Corporation has served shareholders reasonably well, with a total return of 22% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

It looks like Monmouth Real Estate Investment Corporation pays its CEO less than similar sized companies.

Shareholders should note that compensation for Michael Landy is under the median of a group of similar sized 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. Shareholders may want to check for free if Monmouth Real Estate Investment insiders are buying or selling shares.

Important note: Monmouth Real Estate Investment 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 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.