Yahoo Finance We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Empire State Realty Trust, Inc.'s (NYSE:ESRT) CEO For Now
Key Insights
Empire State Realty Trust's Annual General Meeting to take place on 9th of May
Salary of US$849.7k is part of CEO Tony Malkin's total remuneration
The total compensation is 183% higher than the average for the industry
Over the past three years, Empire State Realty Trust's FFO grew by 19% per year and over the past three years, the total loss to shareholders 17%
In the past three years, the share price of Empire State Realty Trust, Inc. (NYSE:ESRT) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 9th of May. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
See our latest analysis for Empire State Realty Trust
How Does Total Compensation For Tony Malkin Compare With Other Companies In The Industry?
At the time of writing, our data shows that Empire State Realty Trust, Inc. has a market capitalization of US$2.5b, and reported total annual CEO compensation of US$9.0m for the year to December 2023. That's a modest increase of 6.8% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$850k.
On examining similar-sized companies in the American REITs industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$3.2m. Accordingly, our analysis reveals that Empire State Realty Trust, Inc. pays Tony Malkin north of the industry median. Furthermore, Tony Malkin directly owns US$6.5m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$850k | US$810k | 9% |
Other | US$8.1m | US$7.6m | 91% |
Total Compensation | US$9.0m | US$8.4m | 100% |
Speaking on an industry level, nearly 24% of total compensation represents salary, while the remainder of 76% is other remuneration. Empire State Realty Trust pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Empire State Realty Trust, Inc.'s Growth
Empire State Realty Trust, Inc.'s funds from operations (FFO) grew 19% per yearover the last three years. It achieved revenue growth of 6.7% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Empire State Realty Trust, Inc. Been A Good Investment?
With a three year total loss of 17% for the shareholders, Empire State Realty Trust, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Empire State Realty Trust that investors should be aware of in a dynamic business environment.
Important note: Empire State Realty Trust is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
