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Should You Worry About Armada Hoffler Properties, Inc.'s (NYSE:AHH) CEO Pay Cheque?

Simply Wall St

In 2012 Lou Haddad was appointed CEO of Armada Hoffler Properties, Inc. (NYSE:AHH). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Armada Hoffler Properties

How Does Lou Haddad's Compensation Compare With Similar Sized Companies?

According to our data, Armada Hoffler Properties, Inc. has a market capitalization of US$1.4b, and paid its CEO total annual compensation worth US$1.7m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$780k. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$4.0m.

A first glance this seems like a real positive for shareholders, since Lou Haddad is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business.

You can see a visual representation of the CEO compensation at Armada Hoffler Properties, below.

NYSE:AHH CEO Compensation, October 19th 2019

Is Armada Hoffler Properties, Inc. Growing?

Over the last three years Armada Hoffler Properties, Inc. has shrunk its earnings per share by an average of 36% per year (measured with a line of best fit). In the last year, its revenue is down 13%.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.

Has Armada Hoffler Properties, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Armada Hoffler Properties, Inc. for providing a total return of 55% over three years. 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.

In Summary...

It appears that Armada Hoffler Properties, Inc. remunerates its CEO below most similar sized companies.

Lou Haddad is paid less than CEOs of similar size companies. While the company isn't growing on our analysis, shareholder returns have been good in recent years. So, while it would be nice to have EPS growth, on our analysis the CEO compensation is not an issue. Whatever your view on compensation, you might want to check if insiders are buying or selling Armada Hoffler Properties shares (free trial).

Important note: Armada Hoffler Properties 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 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.