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Is National Storage Affiliates Trust's (NYSE:NSA) CEO Salary Justified?

Simply Wall St

Arlen Nordhagen became the CEO of National Storage Affiliates Trust (NYSE:NSA) in 2013. First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

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See our latest analysis for National Storage Affiliates Trust

How Does Arlen Nordhagen's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that National Storage Affiliates Trust has a market cap of US$2.6b, and is paying total annual CEO compensation of US$2.0m. (This figure is for the year to December 2018). That's less than last year. While we always look at total compensation first, we note that the salary component is less, at US$495k. 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$5.3m.

A first glance this seems like a real positive for shareholders, since Arlen Nordhagen 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.

The graphic below shows how CEO compensation at National Storage Affiliates Trust has changed from year to year.

NYSE:NSA CEO Compensation, May 23rd 2019

Is National Storage Affiliates Trust Growing?

National Storage Affiliates Trust has reduced its earnings per share by an average of 73% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 21%.

Sadly for shareholders, earnings per share are actually down, over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has National Storage Affiliates Trust Been A Good Investment?

Most shareholders would probably be pleased with National Storage Affiliates Trust for providing a total return of 64% over three years. 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.

In Summary...

National Storage Affiliates Trust is currently paying its CEO below what is normal for companies of its size.

Arlen Nordhagen receives relatively low remuneration compared to similar sized companies. And while the company isn't growing earnings per share, total returns have been pleasing. We would like to see EPS growth, but in our view it seems the CEO is remunerated reasonably. So you may want to check if insiders are buying National Storage Affiliates Trust 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.

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.