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In 2015 Kevin Nowlan was appointed CEO of Hibernia REIT Plc (ISE:HBRN). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Kevin Nowlan's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Hibernia REIT Plc has a market cap of €1.0b, and is paying total annual CEO compensation of €731k. (This figure is for the year to March 2019). We note that's an increase of 99% above last year. While we always look at total compensation first, we note that the salary component is less, at €450k. We looked at a group of companies with market capitalizations from €355m to €1.4b, and the median CEO total compensation was €931k.
That means Kevin Nowlan receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see a visual representation of the CEO compensation at Hibernia REIT, below.
Is Hibernia REIT Plc Growing?
Over the last three years Hibernia REIT Plc has shrunk its earnings per share by an average of 3.0% per year (measured with a line of best fit). It achieved revenue growth of 14% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. 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 Hibernia REIT Plc Been A Good Investment?
With a total shareholder return of 18% over three years, Hibernia REIT Plc shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
Kevin Nowlan is paid around the same as most CEOs of similar size companies.
The company isn't growing earnings per share, and nor have the total returns inspired us. Shareholders might not love the fact the CEO remuneration is up on last year. We're not saying the CEO pay is too generous, but we'd venture the company should look to improve its business metrics (and share price) before paying any more. Whatever your view on compensation, you might want to check if insiders are buying or selling Hibernia REIT shares (free trial).
Important note: Hibernia REIT 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 firstname.lastname@example.org. 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.