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Is Stratus Properties Inc.'s (NASDAQ:STRS) CEO Overpaid Relative To Its Peers?

Simply Wall St

Beau Armstrong became the CEO of Stratus Properties Inc. (NASDAQ:STRS) in 1998. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. 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 Stratus Properties

How Does Beau Armstrong's Compensation Compare With Similar Sized Companies?

According to our data, Stratus Properties Inc. has a market capitalization of US$227m, and paid its CEO total annual compensation worth US$1.8m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$492k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$100m to US$400m, we found the median CEO total compensation was US$1.2m.

Thus we can conclude that Beau Armstrong receives more in total compensation than the median of a group of companies in the same market, and of similar size to Stratus Properties Inc.. However, this doesn't necessarily mean the pay 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 Stratus Properties, below.

NasdaqGS:STRS CEO Compensation, October 22nd 2019

Is Stratus Properties Inc. Growing?

Stratus Properties Inc. has reduced its earnings per share by an average of 10% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 13%.

Unfortunately, earnings per share have trended lower over the last 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. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Stratus Properties Inc. Been A Good Investment?

With a total shareholder return of 21% over three years, Stratus Properties Inc. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

We compared the total CEO remuneration paid by Stratus Properties Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us. And while shareholder returns have been respectable, they have hardly been superb. So we doubt many shareholders would consider the CEO pay to be particularly modest! Whatever your view on compensation, you might want to check if insiders are buying or selling Stratus Properties shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.