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This article will reflect on the compensation paid to Ken Bernstein who has served as CEO of Acadia Realty Trust (NYSE:AKR) since 2001. This analysis will also assess whether Acadia Realty Trust pays its CEO appropriately, considering its funds from operations growth and total shareholder returns.
How Does Total Compensation For Ken Bernstein Compare With Other Companies In The Industry?
Our data indicates that Acadia Realty Trust has a market capitalization of US$1.4b, and total annual CEO compensation was reported as US$5.7m for the year to December 2019. That's a notable increase of 12% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$700k.
On comparing similar companies from the same industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$4.4m. This suggests that Ken Bernstein is paid more than the median for the industry. Furthermore, Ken Bernstein directly owns US$5.5m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. It's interesting to note that Acadia Realty Trust allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Acadia Realty Trust's Growth Numbers
Acadia Realty Trust has reduced its funds from operations (FFO) by 4.6% per year over the last three years. In the last year, its revenue is down 10%.
Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Acadia Realty Trust Been A Good Investment?
Given the total shareholder loss of 37% over three years, many shareholders in Acadia Realty Trust are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we touched on above, Acadia Realty Trust is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look good against shareholder returns, which have been negative for the past three years. To make matters worse, FFO growth has also been negative during this period. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 5 warning signs (and 2 which are concerning) in Acadia Realty Trust we think you should know about.
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.
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