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Should You Worry About Apartment Investment and Management Company's (NYSE:AIV) CEO Pay Cheque?

Simply Wall St

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Terry Considine became the CEO of Apartment Investment and Management Company (NYSE:AIV) in 1994. First, this article will compare CEO compensation with compensation at similar sized companies. 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 process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Apartment Investment and Management

How Does Terry Considine's Compensation Compare With Similar Sized Companies?

According to our data, Apartment Investment and Management Company has a market capitalization of US$8.1b, and pays its CEO total annual compensation worth US$20m. (This is based on the year to December 2018). That's a notable increase of 220% on last year. While we always look at total compensation first, we note that the salary component is less, at US$700k. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.9m.

As you can see, Terry Considine is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Apartment Investment and Management Company 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, below, how CEO compensation at Apartment Investment and Management has changed over time.

NYSE:AIV CEO Compensation, June 9th 2019

Is Apartment Investment and Management Company Growing?

Apartment Investment and Management Company has increased its earnings per share (EPS) by an average of 41% a year, over the last three years (using a line of best fit). In the last year, its revenue is down -4.8%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. 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 Apartment Investment and Management Company Been A Good Investment?

I think that the total shareholder return of 39%, over three years, would leave most Apartment Investment and Management Company shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

We examined the amount Apartment Investment and Management Company pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Apartment Investment and Management.

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.