In 2001 Kuldip Sahi was appointed CEO of Morguard Real Estate Investment Trust (TSE:MRT.UN). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Kuldip Sahi's Compensation Compare With Similar Sized Companies?
Our data indicates that Morguard Real Estate Investment Trust is worth CA$710m, and total annual CEO compensation was reported as CA$100k for the year to December 2018. Notably, the salary of CA$100k is the vast majority of the CEO compensation. We examined companies with market caps from CA$264m to CA$1.1b, and discovered that the median CEO total compensation of that group was CA$1.4m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Morguard Real Estate Investment Trust has changed over time.
Is Morguard Real Estate Investment Trust Growing?
Morguard Real Estate Investment Trust has reduced its earnings per share by an average of 18% a year, over the last three years (measured with a line of best fit). Revenue was pretty flat on last year.
Unfortunately, earnings per share have trended lower over the last three years. And the flat revenue hardly impresses. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Morguard Real Estate Investment Trust Been A Good Investment?
With a total shareholder return of 1.2% over three years, Morguard Real Estate Investment Trust has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.
Morguard Real Estate Investment Trust is currently paying its CEO below what is normal for companies of its size.
The compensation paid to Kuldip Sahi is lower than is usual at similar sized companies. But the business isn't growing earnings per share, and the returns to shareholders haven't been wonderful. There is room for improved company performance, but we don't see the CEO pay as a big issue here. Whatever your view on compensation, you might want to check if insiders are buying or selling Morguard Real Estate Investment Trust shares (free trial).
Important note: Morguard 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.
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