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Owen Thomas has been the CEO of Boston Properties, Inc. (NYSE:BXP) since 2013. This analysis aims first to contrast CEO compensation with other large 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Owen Thomas's Compensation Compare With Similar Sized Companies?
According to our data, Boston Properties, Inc. has a market capitalization of US$23b, and pays its CEO total annual compensation worth US$12m. (This is based on the year to December 2018). We note that's an increase of 16% above last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$875k. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
So Owen Thomas receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Boston Properties has changed from year to year.
Is Boston Properties, Inc. Growing?
Boston Properties, Inc. has reduced its earnings per share by an average of 1.3% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 4.8%.
The lack of earnings per share growth in the last three years is unimpressive. The fairly low revenue growth fails to impress given that the earnings per share is down. 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 Boston Properties, Inc. Been A Good Investment?
With a total shareholder return of 14% over three years, Boston Properties, Inc. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
Owen Thomas is paid around the same as most CEOs of large companies.
The company isn't growing earnings per share, and nor have the total returns inspired us. We doubt shareholders are particularly happy to see that the CEO compensation increased on last year. We're not saying the CEO pay is too generous, but one might argue that the company should improve returns to shareholders before increasing it. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Boston Properties (free visualization of insider trades).
If you want to buy a stock that is better than Boston Properties, 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 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.