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In 1996 John Kilroy was appointed CEO of Kilroy Realty Corporation (NYSE:KRC). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. 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.
How Does John Kilroy's Compensation Compare With Similar Sized Companies?
Our data indicates that Kilroy Realty Corporation is worth US$7.9b, and total annual CEO compensation is US$44m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$1.2m. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.9m.
It would therefore appear that Kilroy Realty Corporation pays John Kilroy 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. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Kilroy Realty has changed from year to year.
Is Kilroy Realty Corporation Growing?
On average over the last three years, Kilroy Realty Corporation has shrunk earnings per share by 23% each year (measured with a line of best fit). Its revenue is up 6.0% over last year.
Unfortunately, earnings per share have trended lower over the last three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has Kilroy Realty Corporation Been A Good Investment?
Kilroy Realty Corporation has served shareholders reasonably well, with a total return of 21% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
We compared total CEO remuneration at Kilroy Realty Corporation with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
While shareholder returns are acceptable, they don't delight. So you may want to delve deeper, because we don't think the CEO pay is too low. Whatever your view on compensation, you might want to check if insiders are buying or selling Kilroy Realty shares (free trial).
If you want to buy a stock that is better than Kilroy Realty, this free list of high return, low debt companies is a great place to look.
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 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. Thank you for reading.