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Does Urstadt Biddle Properties Inc.'s (NYSE:UBA) CEO Pay Reflect Performance?

Simply Wall St
·3 mins read

Willing Biddle has been the CEO of Urstadt Biddle Properties Inc. (NYSE:UBA) since 2013. 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Urstadt Biddle Properties

How Does Willing Biddle's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Urstadt Biddle Properties Inc. has a market cap of US$685m, and reported total annual CEO compensation of US$2.1m for the year to October 2019. That's below the compensation, last year. We think total compensation is more important but we note that the CEO salary is lower, at US$384k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.8m.

So Willing Biddle receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

The graphic below shows how CEO compensation at Urstadt Biddle Properties has changed from year to year.

NYSE:UBA CEO Compensation, March 10th 2020
NYSE:UBA CEO Compensation, March 10th 2020

Is Urstadt Biddle Properties Inc. Growing?

On average over the last three years, Urstadt Biddle Properties Inc. has shrunk earnings per share by 10% each year (measured with a line of best fit). In the last year, its revenue is up 3.7%.

Sadly for shareholders, earnings per share are actually down, over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.

Has Urstadt Biddle Properties Inc. Been A Good Investment?

Urstadt Biddle Properties Inc. has generated a total shareholder return of 7.5% over three years, so most shareholders wouldn't be too disappointed. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Remuneration for Willing Biddle is close enough to the median pay for a CEO of a similar sized company .

We're not seeing great strides in earnings per share, and total returns were decent but not amazing in the last three years. We're not saying the CEO pay is too generous, but one might argue that the company should improve returns to shareholders before increasing it. Moving away from CEO compensation for the moment, we've identified 2 warning signs for Urstadt Biddle Properties that you should be aware of before investing.

Important note: Urstadt Biddle Properties may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.

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. Thank you for reading.