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

Simply Wall St

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Michael Landy has been the CEO of Monmouth Real Estate Investment Corporation (NYSE:MNR) since 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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.

See our latest analysis for Monmouth Real Estate Investment

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

Our data indicates that Monmouth Real Estate Investment Corporation is worth US$1.3b, and total annual CEO compensation is US$1.5m. (This figure is for the year to September 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$788k. 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$3.9m.

Most shareholders would consider it a positive that Michael Landy takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. 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, May 7th 2019

Is Monmouth Real Estate Investment Corporation Growing?

Monmouth Real Estate Investment Corporation has reduced its earnings per share by an average of 3.6% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 18%.

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. Shareholders might be interested in this free visualization of analyst forecasts.

Has Monmouth Real Estate Investment Corporation Been A Good Investment?

Monmouth Real Estate Investment Corporation has generated a total shareholder return of 32% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

It appears that Monmouth Real Estate Investment Corporation remunerates its CEO below most similar sized companies.

The compensation paid to Michael Landy is lower than is usual at 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. So you may want to check if insiders are buying Monmouth Real Estate Investment shares with their own money (free access).

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.