In 2002 George Carter was appointed CEO of Franklin Street Properties Corp (NYSEMKT:FSP). First, this article will compare CEO compensation with compensation at similar sized companies. 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 method should give us information to assess how appropriately the company pays the CEO.
How Does George Carter’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Franklin Street Properties Corp has a market cap of US$820m, and is paying total annual CEO compensation of US$656k. (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$300k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO compensation of that group was US$2.2m.
A first glance this seems like a real positive for shareholders, since George Carter is paid less than the average compensation paid by similar sized companies. Though positive, it’s important we delve into the performance of the actual business.
You can see, below, how CEO compensation at Franklin Street Properties has changed over time.
Is Franklin Street Properties Corp Growing?
Over the last three years Franklin Street Properties Corp has shrunk its earnings per share by an average of 91% per year. It achieved revenue growth of 1.9% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. The modest increase in revenue in the last year isn’t enough to make me overlook the disappointing change in earnings per share. 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 Franklin Street Properties Corp Been A Good Investment?
With a three year total loss of 7.6%, Franklin Street Properties Corp would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
It appears that Franklin Street Properties Corp remunerates its CEO below most similar sized companies.
The compensation paid to George Carter is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). We would not call the pay too generous, but nor would we claim the CEO is underpaid, given lacklustre business performance. Whatever your view on compensation, you might want to check if insiders are buying or selling Franklin Street Properties shares (free trial).
Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .
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 email@example.com.