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Maria Hawthorne became the CEO of PS Business Parks, Inc. (NYSE:PSB) in 2016. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Maria Hawthorne's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that PS Business Parks, Inc. has a market cap of US$6.1b, and is paying total annual CEO compensation of US$3.8m. (This figure is for the year to December 2018). We note that's an increase of 335% above last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$451k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$6.9m.
A first glance this seems like a real positive for shareholders, since Maria Hawthorne is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at PS Business Parks has changed from year to year.
Is PS Business Parks, Inc. Growing?
PS Business Parks, Inc. has increased its earnings per share (EPS) by an average of 38% a year, over the last three years (using a line of best fit). It achieved revenue growth of 3.1% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Shareholders might be interested in this free visualization of analyst forecasts.
Has PS Business Parks, Inc. Been A Good Investment?
I think that the total shareholder return of 82%, over three years, would leave most PS Business Parks, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
PS Business Parks, Inc. is currently paying its CEO below what is normal for companies of its size. Many would consider this to indicate that the pay is modest since the business is growing. And given most shareholders are probably very happy with recent returns, you might even think that Maria Hawthorne deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. But it is even better if company insiders are also buying shares with their own money. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at PS Business Parks.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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 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.