How Is Simon Property Group's (NYSE:SPG) CEO Compensated?

This article will reflect on the compensation paid to David Simon who has served as CEO of Simon Property Group, Inc. (NYSE:SPG) since 1995. This analysis will also look to assess whether the CEO is appropriately paid, considering recent funds from operations growth and investor returns for Simon Property Group.

See our latest analysis for Simon Property Group

Comparing Simon Property Group, Inc.'s CEO Compensation With the industry

According to our data, Simon Property Group, Inc. has a market capitalization of US$23b, and paid its CEO total annual compensation worth US$10m over the year to December 2019. That's a notable decrease of 8.7% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.3m.

On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$7.2m. This suggests that David Simon is paid more than the median for the industry. What's more, David Simon holds US$61m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. In Simon Property Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison 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.

Simon Property Group, Inc.'s Growth

Over the last three years, Simon Property Group, Inc. has not seen its funds from operations (FFO) change much, though there is a slight positive movement. It saw its revenue drop 4.9% over the last year.

We would prefer it if there was revenue growth, but the modest FFOgrowth gives us some relief. It's hard to reach a conclusion about business performance right now. This may be one to watch. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Simon Property Group, Inc. Been A Good Investment?

Since shareholders would have lost about 54% over three years, some Simon Property Group, Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As previously discussed, David is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. The growth in the business has been uninspiring, but the shareholder returns for Simon Property Group have arguably been worse, over the last three years. And the situation doesn't look all that good when you see David is remunerated higher than the industry average. All things considered, we believe shareholders would be disappointed to see David's compensation grow without first seeing an improvement in the performance of the company.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for Simon Property Group that investors should look into moving forward.

Switching gears from Simon Property Group, 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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