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In 2014 Justin Knight was appointed CEO of Apple Hospitality REIT, Inc. (NYSE:APLE). 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.
How Does Justin Knight's Compensation Compare With Similar Sized Companies?
Our data indicates that Apple Hospitality REIT, Inc. is worth US$3.6b, and total annual CEO compensation is US$3.1m. (This number is for the twelve months until December 2018). That's less than last year. While we always look at total compensation first, we note that the salary component is less, at US$525k. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO total compensation was US$5.2m.
A first glance this seems like a real positive for shareholders, since Justin Knight is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see, below, how CEO compensation at Apple Hospitality REIT has changed over time.
Is Apple Hospitality REIT, Inc. Growing?
Over the last three years Apple Hospitality REIT, Inc. has grown its earnings per share (EPS) by an average of 12% per year (using a line of best fit). Its revenue is up 2.6% over last year.
This demonstrates that the company has been improving recently. A good result. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.
Has Apple Hospitality REIT, Inc. Been A Good Investment?
Apple Hospitality REIT, Inc. has not done too badly by shareholders, with a total return of 1.9%, over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
It looks like Apple Hospitality REIT, Inc. pays its CEO less than similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. The total shareholder return might not be amazing, but that doesn't mean that Justin Knight is paid too much.
It's good to see reasonable payment of the CEO, even while the business improves. It would be an additional positive if insiders are buying shares. Shareholders may want to check for free if Apple Hospitality REIT insiders are buying or selling shares.
Important note: Apple Hospitality REIT may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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 email@example.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.