In 2013 Joey Agree was appointed CEO of Agree Realty Corporation (NYSE:ADC). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Joey Agree's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Agree Realty Corporation has a market cap of US$3.3b, and reported total annual CEO compensation of US$4.9m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$610k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$5.1m.
So Joey Agree is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at Agree Realty, below.
Is Agree Realty Corporation Growing?
Over the last three years Agree Realty Corporation has shrunk its earnings per share by an average of 4.7% per year (measured with a line of best fit). Its revenue is up 41% over last year.
The reduction in earnings per share, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. You might want to check this free visual report on analyst forecasts for future earnings.
Has Agree Realty Corporation Been A Good Investment?
Boasting a total shareholder return of 85% over three years, Agree Realty Corporation has done well by shareholders. 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.
Joey Agree is paid around the same as most CEOs of similar size companies.
While the growth could be better, the shareholder returns are clearly good. So considering most shareholders would be happy, we'd say the CEO pay is appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling Agree Realty shares (free trial).
Important note: Agree Realty 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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