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Does UMH Properties, Inc.'s (NYSE:UMH) CEO Pay Matter?

Simply Wall St

Samuel Landy has been the CEO of UMH Properties, Inc. (NYSE:UMH) since 1995. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for UMH Properties

How Does Samuel Landy's Compensation Compare With Similar Sized Companies?

According to our data, UMH Properties, Inc. has a market capitalization of US$578m, and paid its CEO total annual compensation worth US$3.2m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$649k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO total compensation was US$1.8m.

It would therefore appear that UMH Properties, Inc. pays Samuel Landy 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. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at UMH Properties has changed over time.

NYSE:UMH CEO Compensation, October 15th 2019

Is UMH Properties, Inc. Growing?

Over the last three years UMH Properties, Inc. has shrunk its earnings per share by an average of 74% per year (measured with a line of best fit). It achieved revenue growth of 17% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.

Has UMH Properties, Inc. Been A Good Investment?

I think that the total shareholder return of 42%, over three years, would leave most UMH Properties, Inc. shareholders smiling. 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 UMH Properties, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us. On the other hand, returns have been good, so the company is doing something right. So on this analysis we'd stop short of criticizing the level of CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling UMH Properties shares (free trial).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.