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Is Retail Properties of America, Inc.’s (NYSE:RPAI) CEO Paid At A Competitive Rate?

Bryan Cramer

Steve Grimes has been the CEO of Retail Properties of America, Inc. (NYSE:RPAI) since 2009. 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. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Retail Properties of America

How Does Steve Grimes’s Compensation Compare With Similar Sized Companies?

Our data indicates that Retail Properties of America, Inc. is worth US$2.4b, and total annual CEO compensation is US$4.8m. (This figure is for the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$850k. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO compensation of that group was US$3.8m.

So Steve Grimes is paid around the average of the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.

The graphic below shows how CEO compensation at Retail Properties of America has changed from year to year.

NYSE:RPAI CEO Compensation December 26th 18

Is Retail Properties of America, Inc. Growing?

Over the last three years Retail Properties of America, Inc. has grown its earnings per share (EPS) by an average of 21% per year. Its revenue is down -11% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end.

It could be important to check this free visual depiction of what analysts expect for the future.

Has Retail Properties of America, Inc. Been A Good Investment?

Since shareholders would have lost about 17% over three years, some Retail Properties of America, Inc. shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

Remuneration for Steve Grimes is close enough to the median pay for a CEO of a similar sized company .

We’d say the company can boast of its EPS growth, but we cannot say the same about the lacklustre shareholder returns (over the last three years). We’d be surprised if shareholders want to see a pay rise for the CEO, but we’d stop short of calling their pay too generous. Whatever your view on compensation, you might want to check if insiders are buying or selling Retail Properties of America shares (free trial).

Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.