In 1995 Steve Roth was appointed CEO of Alexander's, Inc. (NYSE:ALX). 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 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.
How Does Steve Roth's Compensation Compare With Similar Sized Companies?
Our data indicates that Alexander's, Inc. is worth US$1.6b, and total annual CEO compensation was reported as US$312k for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at . We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. 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.
A first glance this seems like a real positive for shareholders, since Steve Roth 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.
You can see a visual representation of the CEO compensation at Alexander's, below.
Is Alexander's, Inc. Growing?
Alexander's, Inc. has reduced its earnings per share by an average of 18% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down 2.3%.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Alexander's, Inc. Been A Good Investment?
Given the total loss of 13% over three years, many shareholders in Alexander's, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
It appears that Alexander's, Inc. remunerates its CEO below most similar sized companies.
Steve Roth is paid less than CEOs of similar size companies, but the company isn't growing and total shareholder returns have been disappointing. We would not call the pay too generous, but nor would we claim the CEO is underpaid, given lacklustre business performance. So you may want to check if insiders are buying Alexander's shares with their own money (free access).
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.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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