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Is H&R Real Estate Investment Trust's (TSE:HR.UN) CEO Paid Enough Relative To Peers?

Simply Wall St

Tom Hofstedter has been the CEO of H&R Real Estate Investment Trust (TSE:HR.UN) since 1996. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for H&R Real Estate Investment Trust

How Does Tom Hofstedter's Compensation Compare With Similar Sized Companies?

Our data indicates that H&R Real Estate Investment Trust is worth CA$6.0b, and total annual CEO compensation was reported as CA$4.1m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at CA$1.2m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CA$2.6b to CA$8.3b. The median total CEO compensation was CA$3.8m.

So Tom Hofstedter is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

The graphic below shows how CEO compensation at H&R Real Estate Investment Trust has changed from year to year.

TSX:HR.UN CEO Compensation, January 3rd 2020

Is H&R Real Estate Investment Trust Growing?

Over the last three years H&R Real Estate Investment Trust has shrunk its earnings per share by an average of 8.4% per year (measured with a line of best fit). It saw its revenue drop 3.9% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the impression is worse when you consider revenue is down year-on-year. 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 H&R Real Estate Investment Trust Been A Good Investment?

H&R Real Estate Investment Trust has served shareholders reasonably well, with a total return of 11% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Tom Hofstedter is paid around what is normal the leaders of comparable size companies.

The company isn't growing earnings per share, and nor have the total returns inspired us. We do not think the CEO pay is a problem, but one might argue that the company should improve returns to shareholders before increasing it. Whatever your view on compensation, you might want to check if insiders are buying or selling H&R Real Estate Investment Trust shares (free trial).

If you want to buy a stock that is better than H&R Real Estate Investment Trust, this free list of high return, low debt companies is a great place to look.

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.