W. Baird became the CEO of Terreno Realty Corporation (NYSE:TRNO) in 2010. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. 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 W. Baird's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Terreno Realty Corporation has a market cap of US$3.2b, and reported total annual CEO compensation of US$3.2m for the year to December 2019. That's a notable increase of 52% on last year. While we always look at total compensation first, we note that the salary component is less, at US$800k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$6.0m.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Speaking on an industry level, we can see that nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. It's interesting to note that Terreno Realty pays out a greater portion of remuneration through salary, in comparison to the wider industry.
At first glance this seems like a real positive for shareholders, since W. Baird is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business. You can see a visual representation of the CEO compensation at Terreno Realty, below.
Is Terreno Realty Corporation Growing?
On average over the last three years, Terreno Realty Corporation has seen earnings per share (EPS) move in a favourable direction by 17% each year (using a line of best fit). Its revenue is up 13% over last year.
This demonstrates that the company has been improving recently. A good result. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. You might want to check this free visual report on analyst forecasts for future earnings.
Has Terreno Realty Corporation Been A Good Investment?
I think that the total shareholder return of 57%, over three years, would leave most Terreno Realty Corporation shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
It looks like Terreno Realty Corporation pays its CEO less than similar sized companies.
Many would consider this to indicate that the pay is modest since the business is growing. And given most shareholders are probably very happy with recent returns, you might even think that W. Baird deserves a raise! It is relatively rare to see a modestly paid CEO when performance is so impressive. The cherry on top would be if company insiders are buying shares with their own money. Looking into other areas, we've picked out 4 warning signs for Terreno Realty that investors should think about before committing capital to this stock.
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.
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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Thank you for reading.