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How Should Investors React To Sun Communities' (NYSE:SUI) CEO Pay?

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Simply Wall St
·4 min read
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Gary Shiffman is the CEO of Sun Communities, Inc. (NYSE:SUI), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the funds from operations and shareholder returns of the company.

View our latest analysis for Sun Communities

Comparing Sun Communities, Inc.'s CEO Compensation With the industry

Our data indicates that Sun Communities, Inc. has a market capitalization of US$14b, and total annual CEO compensation was reported as US$8.0m for the year to December 2019. We note that's a decrease of 13% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$692k.

On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$7.7m. This suggests that Sun Communities remunerates its CEO largely in line with the industry average. What's more, Gary Shiffman holds US$207m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2019

2018

Proportion (2019)

Salary

US$692k

US$692k

9%

Other

US$7.3m

US$8.5m

91%

Total Compensation

US$8.0m

US$9.2m

100%

Talking in terms of the industry, salary represented approximately 15% of total compensation out of all the companies we analyzed, while other remuneration made up 85% of the pie. In Sun Communities' case, non-salary compensation represents a greater slice of total remuneration, 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.

ceo-compensation
ceo-compensation

A Look at Sun Communities, Inc.'s Growth Numbers

Over the past three years, Sun Communities, Inc. has seen its funds from operations (FFO) grow by 15% per year. Its revenue is up 6.3% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Sun Communities, Inc. Been A Good Investment?

Boasting a total shareholder return of 74% over three years, Sun Communities, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

As we touched on above, Sun Communities, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The company is growing FFO and total shareholder returns have been pleasing. Although the pay is close to the industry median, overall performance is excellent, so we don't think the CEO is paid too generously. In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 3 warning signs for Sun Communities you should be aware of, and 1 of them is a bit unpleasant.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.