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In 2001 Tom Toomey was appointed CEO of UDR, Inc. (NYSE:UDR). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Tom Toomey's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that UDR, Inc. has a market cap of US$14b, and is paying total annual CEO compensation of US$6.3m. (This is based on the year to December 2018). That's actually a decrease on the year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$800k. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
A first glance this seems like a real positive for shareholders, since Tom Toomey is paid less than the average total compensation paid by other large 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 UDR, below.
Is UDR, Inc. Growing?
Over the last three years UDR, Inc. has shrunk its earnings per share by an average of 18% per year (measured with a line of best fit). It achieved revenue growth of 6.0% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has UDR, Inc. Been A Good Investment?
Boasting a total shareholder return of 47% over three years, UDR, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
UDR, Inc. is currently paying its CEO below what is normal for large companies.
Tom Toomey receives relatively low remuneration compared to most large companies. And while the company isn't growing earnings per share, total returns have been pleasing. Although we could see higher EPS growth, we'd argue the remuneration is not an issue, based on these observations. Shareholders may want to check for free if UDR insiders are buying or selling shares.
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 firstname.lastname@example.org. 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.