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Performance at Agree Realty Corporation (NYSE:ADC) has been reasonably good and CEO Joey Agree has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 06 May 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.
Comparing Agree Realty Corporation's CEO Compensation With the industry
According to our data, Agree Realty Corporation has a market capitalization of US$4.5b, and paid its CEO total annual compensation worth US$7.3m over the year to December 2020. That's a notable increase of 35% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$793k.
On comparing similar companies from the same industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$5.2m. Hence, we can conclude that Joey Agree is remunerated higher than the industry median. Moreover, Joey Agree also holds US$31m worth of Agree Realty stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. Agree Realty sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Agree Realty Corporation's Growth Numbers
Agree Realty Corporation has seen its funds from operations (FFO) increase by 29% per year over the past three years. Its revenue is up 32% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Agree Realty Corporation Been A Good Investment?
We think that the total shareholder return of 59%, over three years, would leave most Agree Realty Corporation shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.
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 did our research and identified 3 warning signs (and 1 which is significant) in Agree Realty we think you should know about.
Important note: Agree Realty is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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