U.S. Markets closed

Should You Worry About Arbor Realty Trust, Inc.'s (NYSE:ABR) CEO Pay Cheque?

Simply Wall St

Ivan Kaufman has been the CEO of Arbor Realty Trust, Inc. (NYSE:ABR) since 2003. 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 method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Arbor Realty Trust

How Does Ivan Kaufman's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Arbor Realty Trust, Inc. has a market cap of US$1.5b, and reported total annual CEO compensation of US$11m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.1m.

Thus we can conclude that Ivan Kaufman receives more in total compensation than the median of a group of companies in the same market, and of similar size to Arbor Realty Trust, Inc.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at Arbor Realty Trust, below.

NYSE:ABR CEO Compensation, October 26th 2019

Is Arbor Realty Trust, Inc. Growing?

On average over the last three years, Arbor Realty Trust, Inc. has grown earnings per share (EPS) by 25% each year (using a line of best fit). It achieved revenue growth of 22% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Shareholders might be interested in this free visualization of analyst forecasts.

Has Arbor Realty Trust, Inc. Been A Good Investment?

Boasting a total shareholder return of 144% over three years, Arbor Realty Trust, Inc. 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.

In Summary...

We compared the total CEO remuneration paid by Arbor Realty Trust, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. So you may want to check if insiders are buying Arbor Realty Trust shares with their own money (free access).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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.