Performance at Extra Space Storage Inc. (NYSE:EXR) has been reasonably good and CEO Joe Margolis has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 26 May 2021. We present our case of why we think CEO compensation looks fair.
View our latest analysis for Extra Space Storage
How Does Total Compensation For Joe Margolis Compare With Other Companies In The Industry?
According to our data, Extra Space Storage Inc. has a market capitalization of US$20b, and paid its CEO total annual compensation worth US$6.8m over the year to December 2020. That’s a modest increase of 7.9% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$850k.
For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$7.8m. So it looks like Extra Space Storage compensates Joe Margolis in line with the median for the industry. What’s more, Joe Margolis holds US$22m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | US$850k | US$850k | 13% |
| Other | US$5.9m | US$5.4m | 87% |
| Total Compensation | US$6.8m | US$6.3m | 100% |
Speaking on an industry level, nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. Extra Space Storage sets aside a smaller share of compensation for salary, in comparison to the overall industry. It’s important to note that a slant towards non-salary compensation suggests that total pay is tied to the company’s performance.
NYSE:EXR CEO Compensation May 20th 2021
A Look at Extra Space Storage Inc.’s Growth Numbers
Over the past three years, Extra Space Storage Inc. has seen its funds from operations (FFO) grow by 8.3% per year. It achieved revenue growth of 4.8% over the last year.
We’d prefer higher revenue growth, but we’re happy with the modest FFO growth. Considering these factors we’d say performance has been pretty decent, though not amazing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company’s future earnings..
Has Extra Space Storage Inc. Been A Good Investment?
Most shareholders would probably be pleased with Extra Space Storage Inc. for providing a total return of 72% over three years. 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.
To Conclude…
The company’s decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for Extra Space Storage you should be aware of, and 1 of them is potentially serious.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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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