A Quick Analysis On Dream Office Real Estate Investment Trust’s (TSE:D.UN) CEO Compensation

This article will reflect on the compensation paid to Michael Cooper who has served as CEO of Dream Office Real Estate Investment Trust (TSE:D.UN) since 2018. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Dream Office Real Estate Investment Trust.

View our latest analysis for Dream Office Real Estate Investment Trust

Comparing Dream Office Real Estate Investment Trust’s CEO Compensation With the industry

According to our data, Dream Office Real Estate Investment Trust has a market capitalization of CA$1.2b, and paid its CEO total annual compensation worth CA$1.5m over the year to December 2019. Notably, that’s an increase of 17% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$500k.

On examining similar-sized companies in the industry with market capitalizations between CA$543m and CA$2.2b, we discovered that the median CEO total compensation of that group was CA$1.7m. So it looks like Dream Office Real Estate Investment Trust compensates Michael Cooper in line with the median for the industry. Moreover, Michael Cooper also holds CA$10m worth of Dream Office Real Estate Investment Trust stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20192018Proportion (2019)
Salary CA$500k CA$417k 34%
Other CA$975k CA$839k 66%
Total CompensationCA$1.5m CA$1.3m100%

Talking in terms of the industry, salary represented approximately 33% of total compensation out of all the companies we analyzed, while other remuneration made up 67% of the pie. Although there is a difference in how total compensation is set, Dream Office Real Estate Investment Trust more or less reflects the market in terms of setting the salary. If non-salary compensation dominates total pay, it’s an indicator that the executive’s salary is tied to company performance.

TSX:D.UN CEO Compensation July 2nd 2020
TSX:D.UN CEO Compensation July 2nd 2020

A Look at Dream Office Real Estate Investment Trust’s Growth Numbers

Over the past three years, Dream Office Real Estate Investment Trust has seen its earnings per share (EPS) grow by 79% per year. It achieved revenue growth of 1.4% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It’s nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Dream Office Real Estate Investment Trust Been A Good Investment?

Dream Office Real Estate Investment Trust has generated a total shareholder return of 22% over three years, so most shareholders would be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.

In Summary…

As previously discussed, Michael is compensated close to the median for companies of its size, and which belong to the same industry. However, it’s admirable that over the last three years, earnings growth for the company has been impressive, though the same can’t be said for investor returns. Considering overall performance, we’d say the compensation is fair, although stockholders will want to see higher returns moving forward.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Dream Office Real Estate Investment Trust (1 is potentially serious!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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