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Is Whitestone REIT (NYSE:WSR) Excessively Paying Its CEO?

Simply Wall St

Jim Mastandrea has been the CEO of Whitestone REIT (NYSE:WSR) since 2006. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Whitestone REIT

How Does Jim Mastandrea's Compensation Compare With Similar Sized Companies?

Our data indicates that Whitestone REIT is worth US$567m, and total annual CEO compensation is US$2.6m. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$600k. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$1.9m.

As you can see, Jim Mastandrea is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Whitestone REIT 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.

You can see a visual representation of the CEO compensation at Whitestone REIT, below.

NYSE:WSR CEO Compensation, September 13th 2019

Is Whitestone REIT Growing?

Over the last three years Whitestone REIT has grown its earnings per share (EPS) by an average of 29% per year (using a line of best fit). In the last year, its revenue is down -4.9%.

This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. It could be important to check this free visual depiction of what analysts expect for the future.

Has Whitestone REIT Been A Good Investment?

Whitestone REIT has generated a total shareholder return of 29% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

We compared total CEO remuneration at Whitestone REIT with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

However, the earnings per share growth over three years is certainly impressive. We also note that, over the same time frame, shareholder returns haven't been bad. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. Whatever your view on compensation, you might want to check if insiders are buying or selling Whitestone REIT shares (free trial).

If you want to buy a stock that is better than Whitestone REIT, this free list of high return, low debt companies is a great place to look.

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.