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Jeff Olson became the CEO of Urban Edge Properties (NYSE:UE) in 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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 Jeff Olson's Compensation Compare With Similar Sized Companies?
According to our data, Urban Edge Properties has a market capitalization of US$1.1b, and paid its CEO total annual compensation worth US$5.0m over the year to December 2019. That's a fairly small increase of 7.7% on year before. While we always look at total compensation first, we note that the salary component is less, at US$1.0m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO total compensation was US$3.4m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Urban Edge Properties. On a sector level, around 15% of total compensation represents salary and 85% is other remuneration. Urban Edge Properties is paying a higher share of its remuneration through a salary in comparison to the overall industry.
It would therefore appear that Urban Edge Properties pays Jeff Olson 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. We can better assess whether the pay is overly generous by looking into the underlying business performance. You can see a visual representation of the CEO compensation at Urban Edge Properties, below.
Is Urban Edge Properties Growing?
Over the last three years, Urban Edge Properties has not seen its earnings per share change much, though there is a positive trend. Its revenue is down 7.4% over last year.
I would prefer it if there was revenue growth, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. It could be important to check this free visual depiction of what analysts expect for the future.
Has Urban Edge Properties Been A Good Investment?
Since shareholders would have lost about 56% over three years, some Urban Edge Properties shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
We examined the amount Urban Edge Properties pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. On another note, Urban Edge Properties has 5 warning signs (and 2 which make us uncomfortable) we think you should know about.
If you want to buy a stock that is better than Urban Edge Properties, this free list of high return, low debt companies is a great place to look.
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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.