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Is Morguard North American Residential Real Estate Investment Trust's (TSE:MRG.UN) CEO Being Overpaid?

Simply Wall St

Rai Sahi became the CEO of Morguard North American Residential Real Estate Investment Trust (TSE:MRG.UN) in 2012. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Morguard North American Residential Real Estate Investment Trust

How Does Rai Sahi's Compensation Compare With Similar Sized Companies?

Our data indicates that Morguard North American Residential Real Estate Investment Trust is worth CA$1.1b, and total annual CEO compensation was reported as CA$584k for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CA$226k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from CA$525m to CA$2.1b, and discovered that the median CEO total compensation of that group was CA$2.0m.

A first glance this seems like a real positive for shareholders, since Rai Sahi is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.

The graphic below shows how CEO compensation at Morguard North American Residential Real Estate Investment Trust has changed from year to year.

TSX:MRG.UN CEO Compensation, October 21st 2019

Is Morguard North American Residential Real Estate Investment Trust Growing?

Over the last three years Morguard North American Residential Real Estate Investment Trust has grown its earnings per share (EPS) by an average of 48% per year (using a line of best fit). Its revenue is up 6.7% over last year.

This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. You might want to check this free visual report on analyst forecasts for future earnings.

Has Morguard North American Residential Real Estate Investment Trust Been A Good Investment?

Most shareholders would probably be pleased with Morguard North American Residential Real Estate Investment Trust for providing a total return of 74% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

It looks like Morguard North American Residential Real Estate Investment Trust pays its CEO less than similar sized companies.

Since the business is growing, many would argue this suggests the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Rai Sahi deserves a raise! It is relatively rare to see a modestly paid CEO when performance is so impressive. The cherry on top would be if company insiders are buying shares with their own money. Whatever your view on compensation, you might want to check if insiders are buying or selling Morguard North American Residential Real Estate Investment Trust shares (free trial).

Important note: Morguard North American Residential Real Estate Investment Trust may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.

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. Thank you for reading.