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What Can We Learn About Arbor Realty Trust's (NYSE:ABR) CEO Compensation?

Simply Wall St
·4 min read

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This article will reflect on the compensation paid to Ivan Kaufman who has served as CEO of Arbor Realty Trust, Inc. (NYSE:ABR) since 2003. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Arbor Realty Trust.

See our latest analysis for Arbor Realty Trust

How Does Total Compensation For Ivan Kaufman Compare With Other Companies In The Industry?

At the time of writing, our data shows that Arbor Realty Trust, Inc. has a market capitalization of US$1.0b, and reported total annual CEO compensation of US$8.9m for the year to December 2019. That's a notable decrease of 16% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.0m.

For comparison, other companies in the same industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$5.0m. Hence, we can conclude that Ivan Kaufman is remunerated higher than the industry median. What's more, Ivan Kaufman holds US$8.1m 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$1.0m

US$1.0m

11%

Other

US$7.9m

US$9.7m

89%

Total Compensation

US$8.9m

US$11m

100%

Speaking on an industry level, nearly 12% of total compensation represents salary, while the remainder of 88% is other remuneration. Our data reveals that Arbor Realty Trust allocates salary more or less in line with the wider market. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

Arbor Realty Trust, Inc.'s Growth

Over the last three years, Arbor Realty Trust, Inc. has shrunk its earnings per share by 29% per year. In the last year, its revenue is down 16%.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Arbor Realty Trust, Inc. Been A Good Investment?

Arbor Realty Trust, Inc. has served shareholders reasonably well, with a total return of 30% 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...

As we touched on above, Arbor Realty Trust, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Unfortunately, earnings per share has not grown in three years, failing to impress us. And shareholder returns are decent but not great. So you may want to delve deeper, because we don't think the amount Ivan makes is justifiable.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 6 warning signs for Arbor Realty Trust you should be aware of, and 2 of them are a bit concerning.

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.