Don Clow has been the CEO of Crombie Real Estate Investment Trust (TSE:CRR.UN) since 2009, and this article will examine the executive’s compensation with respect to the overall performance of the company. This analysis will also assess whether Crombie Real Estate Investment Trust pays its CEO appropriately, considering its funds from operations growth and total shareholder returns.
See our latest analysis for Crombie Real Estate Investment Trust
How Does Total Compensation For Don Clow Compare With Other Companies In The Industry?
Our data indicates that Crombie Real Estate Investment Trust has a market capitalization of CA$2.1b, and total annual CEO compensation was reported as CA$2.7m for the year to December 2019. This means that the compensation hasn’t changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$645k.
For comparison, other companies in the same industry with market capitalizations ranging between CA$1.3b and CA$4.2b had a median total CEO compensation of CA$1.8m. This suggests that Don Clow is paid more than the median for the industry. Moreover, Don Clow also holds CA$2.0m worth of Crombie Real Estate Investment Trust stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 33% of total compensation out of all the companies we analyzed, while other remuneration made up 67% of the pie. Crombie Real Estate Investment Trust pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Crombie Real Estate Investment Trust’s Growth
Crombie Real Estate Investment Trust has reduced its funds from operations (FFO) by 2.6% per year over the last three years. Its revenue is down 4.0% over the previous year.
A lack of FFO improvement is not good to see. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company’s future earnings..
Has Crombie Real Estate Investment Trust Been A Good Investment?
Crombie Real Estate Investment Trust has served shareholders reasonably well, with a total return of 19% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
As previously discussed, Don is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn’t look great when you realize that the company has been suffering from negative FFO growth for the last three years. And while shareholder returns have been respectable, they have hardly been superb. So we think more research is needed, but we don’t think the CEO is underpaid.
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 4 warning signs for Crombie Real Estate Investment Trust you should be aware of, and 1 of them shouldn’t be ignored.
Switching gears from Crombie Real Estate Investment Trust, 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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