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Should You Worry About Washington Prime Group Inc.'s (NYSE:WPG) CEO Pay Cheque?

Simply Wall St

Lou Conforti has been the CEO of Washington Prime Group Inc. (NYSE:WPG) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Washington Prime Group

How Does Lou Conforti's Compensation Compare With Similar Sized Companies?

Our data indicates that Washington Prime Group Inc. is worth US$715m, and total annual CEO compensation is US$4.8m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$900k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.7m.

Thus we can conclude that Lou Conforti receives more in total compensation than the median of a group of companies in the same market, and of similar size to Washington Prime Group Inc.. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at Washington Prime Group has changed over time.

NYSE:WPG CEO Compensation, September 4th 2019

Is Washington Prime Group Inc. Growing?

Over the last three years Washington Prime Group Inc. has grown its earnings per share (EPS) by an average of 28% per year (using a line of best fit). In the last year, its revenue is down -3.3%.

This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. It could be important to check this free visual depiction of what analysts expect for the future.

Has Washington Prime Group Inc. Been A Good Investment?

Given the total loss of 62% over three years, many shareholders in Washington Prime Group Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared total CEO remuneration at Washington Prime Group Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. So you may want to check if insiders are buying Washington Prime Group shares with their own money (free access).

Important note: Washington Prime Group 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 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.