In This Article:
This article will reflect on the compensation paid to Jordan Kaplan who has served as CEO of Douglas Emmett, Inc. (NYSE:DEI) since 2005. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Douglas Emmett.
See our latest analysis for Douglas Emmett
Comparing Douglas Emmett, Inc.'s CEO Compensation With the industry
Our data indicates that Douglas Emmett, Inc. has a market capitalization of US$5.9b, and total annual CEO compensation was reported as US$9.4m for the year to December 2019. That's a fairly small increase of 8.0% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.
On comparing similar companies from the same industry with market caps ranging from US$4.0b to US$12b, we found that the median CEO total compensation was US$6.0m. Hence, we can conclude that Jordan Kaplan is remunerated higher than the industry median. Moreover, Jordan Kaplan also holds US$79m worth of Douglas Emmett stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | US$1.0m | US$1.0m | 11% |
| Other | US$8.4m | US$7.7m | 89% |
| Total Compensation | US$9.4m | US$8.7m | 100% |
Talking in terms of the industry, salary represented approximately 15% of total compensation out of all the companies we analyzed, while other remuneration made up 85% of the pie. Douglas Emmett 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.
A Look at Douglas Emmett, Inc.'s Growth Numbers
Douglas Emmett, Inc.'s earnings per share (EPS) grew 47% per year over the last three years. Its revenue is up 3.6% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Douglas Emmett, Inc. Been A Good Investment?
Since shareholders would have lost about 16% over three years, some Douglas Emmett, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
As previously discussed, Jordan is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, we must not forget that the EPS growth has been very strong, but shareholder returns — over the same period — have been disappointing. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.