Dominic White has been the CEO of KCR Residential REIT plc (LON:KCR) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Note: The company does not report funds from operations, and as a result, we have used earnings per share in our analysis.
Comparing KCR Residential REIT plc's CEO Compensation With the industry
At the time of writing, our data shows that KCR Residential REIT plc has a market capitalization of UK£6.1m, and reported total annual CEO compensation of UK£146k for the year to June 2020. That's a notable decrease of 48% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth UK£146k.
In comparison with other companies in the industry with market capitalizations under UK£152m, the reported median total CEO compensation was UK£261k. In other words, KCR Residential REIT pays its CEO lower than the industry median. Furthermore, Dominic White directly owns UK£274k worth of shares in the company.
Speaking on an industry level, nearly 38% of total compensation represents salary, while the remainder of 62% is other remuneration. Speaking on a company level, KCR Residential REIT prefers to tread along a traditional path, disbursing all compensation through a salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at KCR Residential REIT plc's Growth Numbers
Over the past three years, KCR Residential REIT plc has seen its earnings per share (EPS) grow by 18% per year. Its revenue is up 33% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has KCR Residential REIT plc Been A Good Investment?
Given the total shareholder loss of 76% over three years, many shareholders in KCR Residential REIT plc are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
KCR Residential REIT pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we touched on above, KCR Residential REIT plc is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However we must not forget that the EPS growth has been very strong over three years. Although we would've liked to see positive investor returns, it would be bold of us to criticize CEO compensation when EPS are up. But shareholders will likely want to hold off on any raise for Dominic until investor returns are positive.
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. We identified 5 warning signs for KCR Residential REIT (3 are a bit unpleasant!) that you should be aware of before investing here.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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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