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Is Fronsac Real Estate Investment Trust's (CVE:FRO.UN) CEO Being Overpaid?

Simply Wall St

In 2017 Jason Parravano was appointed CEO of Fronsac Real Estate Investment Trust (CVE:FRO.UN). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Fronsac Real Estate Investment Trust

How Does Jason Parravano's Compensation Compare With Similar Sized Companies?

Our data indicates that Fronsac Real Estate Investment Trust is worth CA$79m, and total annual CEO compensation was reported as CA$147k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CA$135k. We looked at a group of companies with market capitalizations under CA$264m, and the median CEO total compensation was CA$180k.

That means Jason Parravano receives fairly typical remuneration for the CEO of a company that size. 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 Fronsac Real Estate Investment Trust has changed from year to year.

TSXV:FRO.UN CEO Compensation, November 9th 2019

Is Fronsac Real Estate Investment Trust Growing?

Fronsac Real Estate Investment Trust has reduced its earnings per share by an average of 51% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 43%.

The reduction in earnings per share, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. It could be important to check this free visual depiction of what analysts expect for the future.

Has Fronsac Real Estate Investment Trust Been A Good Investment?

I think that the total shareholder return of 35%, over three years, would leave most Fronsac Real Estate Investment Trust 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...

Jason Parravano is paid around the same as most CEOs of similar size companies.

The company isn't showing particularly great growth, but shareholder returns have been pleasing. So all things considered I'd venture that the CEO pay is appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Fronsac Real Estate Investment Trust (free visualization of insider trades).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.