Yahoo Finance Stratus Properties Inc.'s (NASDAQ:STRS) CEO Might Not Expect Shareholders To Be So Generous This Year
Shareholders will probably not be too impressed with the underwhelming results at Stratus Properties Inc. (NASDAQ:STRS) recently. At the upcoming AGM on 04 June 2021, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.
View our latest analysis for Stratus Properties
Comparing Stratus Properties Inc.'s CEO Compensation With the industry
Our data indicates that Stratus Properties Inc. has a market capitalization of US$224m, and total annual CEO compensation was reported as US$1.7m for the year to December 2020. Notably, that's an increase of 9.7% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$500k.
On comparing similar companies from the same industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$1.4m. So it looks like Stratus Properties compensates Beau Armstrong in line with the median for the industry. Moreover, Beau Armstrong also holds US$14m worth of Stratus Properties stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$500k | US$500k | 29% |
Other | US$1.2m | US$1.0m | 71% |
Total Compensation | US$1.7m | US$1.5m | 100% |
Talking in terms of the industry, salary represented approximately 29% of total compensation out of all the companies we analyzed, while other remuneration made up 71% of the pie. Our data reveals that Stratus Properties allocates salary more or less in line with the wider market. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Stratus Properties Inc.'s Growth
Over the last three years, Stratus Properties Inc. has shrunk its earnings per share by 66% per year. Its revenue is down 53% over the previous year.
The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Stratus Properties Inc. Been A Good Investment?
Given the total shareholder loss of 14% over three years, many shareholders in Stratus Properties Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 2 which are a bit concerning) in Stratus Properties we think you should know about.
Switching gears from Stratus Properties, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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