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Is Tanger Factory Outlet Centers, Inc.'s (NYSE:SKT) CEO Overpaid Relative To Its Peers?

Simply Wall St

In 2009 Steve Tanger was appointed CEO of Tanger Factory Outlet Centers, Inc. (NYSE:SKT). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Tanger Factory Outlet Centers

How Does Steve Tanger's Compensation Compare With Similar Sized Companies?

According to our data, Tanger Factory Outlet Centers, Inc. has a market capitalization of US$1.4b, and pays its CEO total annual compensation worth US$7.0m. (This number is for the twelve months until December 2018). While we always look at total compensation first, we note that the salary component is less, at US$850k. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.1m.

As you can see, Steve Tanger is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Tanger Factory Outlet Centers, Inc. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at Tanger Factory Outlet Centers has changed from year to year.

NYSE:SKT CEO Compensation, August 30th 2019

Is Tanger Factory Outlet Centers, Inc. Growing?

On average over the last three years, Tanger Factory Outlet Centers, Inc. has shrunk earnings per share by 58% each year (measured with a line of best fit). Its revenue is down -2.2% over last year.

Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.

Has Tanger Factory Outlet Centers, Inc. Been A Good Investment?

Given the total loss of 59% over three years, many shareholders in Tanger Factory Outlet Centers, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We examined the amount Tanger Factory Outlet Centers, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.

Arguably worse, investors are without a positive return for the last three years. Some might well form the view that the CEO is paid too generously! Shareholders may want to check for free if Tanger Factory Outlet Centers 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 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.