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Does Agree Realty's (NYSE:ADC) CEO Salary Compare Well With Industry Peers?

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Simply Wall St
·3 min read
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Joey Agree has been the CEO of Agree Realty Corporation (NYSE:ADC) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent funds from operations growth and investor returns for Agree Realty.

See our latest analysis for Agree Realty

Comparing Agree Realty Corporation's CEO Compensation With the industry

According to our data, Agree Realty Corporation has a market capitalization of US$3.5b, and paid its CEO total annual compensation worth US$5.4m over the year to December 2019. Notably, that's an increase of 10% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$665k.

On comparing similar companies from the same industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$5.2m. This suggests that Agree Realty remunerates its CEO largely in line with the industry average. Furthermore, Joey Agree directly owns US$26m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2019

2018

Proportion (2019)

Salary

US$665k

US$610k

12%

Other

US$4.7m

US$4.3m

88%

Total Compensation

US$5.4m

US$4.9m

100%

On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. Agree Realty 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.

ceo-compensation
ceo-compensation

A Look at Agree Realty Corporation's Growth Numbers

Agree Realty Corporation's funds from operations (FFO) grew 25% per yearover the last three years. It achieved revenue growth of 34% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term FFO improvement certainly points to the kind of growth we like to see. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Agree Realty Corporation Been A Good Investment?

Boasting a total shareholder return of 48% over three years, Agree Realty Corporation has done well by shareholders. 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.

In Summary...

As previously discussed, Joey is compensated close to the median for companies of its size, and which belong to the same industry. Investors would surely be happy to see that returns have been great, and that FFO is up. So one could argue that CEO compensation is quite modest, if you consider company performance! Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Agree Realty that you should be aware of before investing.

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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.