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Is Arbor Realty Trust, Inc.'s (NYSE:ABR) CEO Pay Justified?

Simply Wall St

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Ivan Kaufman has been the CEO of Arbor Realty Trust, Inc. (NYSE:ABR) since 2003. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Arbor Realty Trust

How Does Ivan Kaufman's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Arbor Realty Trust, Inc. has a market cap of US$1.5b, and is paying total annual CEO compensation of US$11m. (This number is for the twelve months until December 2018). We note that's an increase of 12% above last year. While we always look at total compensation first, we note that the salary component is less, at US$1.0m. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$3.7m.

It would therefore appear that Arbor Realty Trust, Inc. pays Ivan Kaufman more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see a visual representation of the CEO compensation at Arbor Realty Trust, below.

NYSE:ABR CEO Compensation, May 2nd 2019

Is Arbor Realty Trust, Inc. Growing?

Arbor Realty Trust, Inc. has increased its earnings per share (EPS) by an average of 28% a year, over the last three years (using a line of best fit). Its revenue is up 24% over last year.

This demonstrates that the company has been improving recently. A good result. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Arbor Realty Trust, Inc. Been A Good Investment?

Boasting a total shareholder return of 170% over three years, Arbor Realty Trust, Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

We compared the total CEO remuneration paid by Arbor Realty Trust, Inc., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

However, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Arbor Realty Trust (free visualization of insider trades).

If you want to buy a stock that is better than Arbor Realty Trust, this free list of high return, low debt companies is a great place to look.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.