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How Is Seritage Growth Properties' (NYSE:SRG) CEO Compensated?

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The CEO of Seritage Growth Properties (NYSE:SRG) is Ben Schall, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Seritage Growth Properties.

Check out our latest analysis for Seritage Growth Properties

How Does Total Compensation For Ben Schall Compare With Other Companies In The Industry?

According to our data, Seritage Growth Properties has a market capitalization of US$625m, and paid its CEO total annual compensation worth US$4.1m over the year to December 2019. We note that's a decrease of 54% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$875k.

For comparison, other companies in the same industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$4.0m. This suggests that Seritage Growth Properties remunerates its CEO largely in line with the industry average. Furthermore, Ben Schall directly owns US$2.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2019

2018

Proportion (2019)

Salary

US$875k

US$875k

21%

Other

US$3.2m

US$8.0m

79%

Total Compensation

US$4.1m

US$8.9m

100%

Speaking on an industry level, nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. Seritage Growth Properties pays out 21% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

Seritage Growth Properties' Growth

Seritage Growth Properties has reduced its earnings per share by 7.0% a year over the last three years. In the last year, its revenue is down 30%.

Few shareholders would be pleased to read that earnings have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Seritage Growth Properties Been A Good Investment?

With a three year total loss of 75% for the shareholders, Seritage Growth Properties would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we touched on above, Seritage Growth Properties 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, earnings growth and shareholder returns have been in the red for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for Seritage Growth Properties you should be aware of, and 1 of them doesn't sit too well with us.

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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.