Jim Mastandrea became the CEO of Whitestone REIT (NYSE:WSR) in 2006, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Whitestone REIT pays its CEO appropriately, considering its funds from operations growth and total shareholder returns.
How Does Total Compensation For Jim Mastandrea Compare With Other Companies In The Industry?
Our data indicates that Whitestone REIT has a market capitalization of US$273m, and total annual CEO compensation was reported as US$2.6m for the year to December 2019. That's mostly flat as compared to the prior year's compensation. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$600k.
On comparing similar companies from the same industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$2.1m. So it looks like Whitestone REIT compensates Jim Mastandrea in line with the median for the industry. What's more, Jim Mastandrea holds US$7.0m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Talking in terms of the industry, salary represented approximately 15% of total compensation out of all the companies we analyzed, while other remuneration made up 85% of the pie. Whitestone REIT pays out 23% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Whitestone REIT's Growth
Whitestone REIT has seen its funds from operations (FFO) increase by 8.1% per year over the past three years. Its revenue is down 2.2% over the previous year.
We would prefer it if there was revenue growth, but the modest improvement in FFO is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Whitestone REIT Been A Good Investment?
With a three year total loss of 37% for the shareholders, Whitestone REIT would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
As we touched on above, Whitestone REIT is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, Whitestone REIT is suffering from adverse shareholder returns and althoughFFO have grown over the past three years, they have not been extraordinary. Although we wouldn't say CEO compensation is exceptionally high, it isn't very low either. Shareholders might want to see substantial improvements in returns before agreeing that Jim deserves a raise.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 5 warning signs for Whitestone REIT (of which 2 don't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from Whitestone REIT, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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.
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