Hamid Moghadam became the CEO of Prologis, Inc. (NYSE:PLD) in 2012. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. 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. This method should give us information to assess how appropriately the company pays the CEO.
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How Does Hamid Moghadam's Compensation Compare With Similar Sized Companies?
Our data indicates that Prologis, Inc. is worth US$49b, and total annual CEO compensation is US$28m. (This is based on the year to December 2018). Notably, that's an increase of 46% over the year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0m. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$12m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
Thus we can conclude that Hamid Moghadam receives more in total compensation than the median of a group of large companies in the same market as Prologis, Inc.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Prologis has changed over time.
Is Prologis, Inc. Growing?
Prologis, Inc. has increased its earnings per share (EPS) by an average of 21% a year, over the last three years (using a line of best fit). It achieved revenue growth of 7.8% over the last year.
This demonstrates that the company has been improving recently. A good result. It's also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.
Has Prologis, Inc. Been A Good Investment?
I think that the total shareholder return of 80%, over three years, would leave most Prologis, Inc. 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.
We examined the amount Prologis, Inc. pays its CEO, and compared it to the amount paid by other large companies. 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. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. So you may want to check if insiders are buying Prologis shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.