Stock Analysis

How Much Is Abacus Property Group's (ASX:ABP) CEO Getting Paid?

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Steven Sewell became the CEO of Abacus Property Group (ASX:ABP) in 2018, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Abacus Property Group pays its CEO appropriately, considering its funds from operations growth and total shareholder returns.

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How Does Total Compensation For Steven Sewell Compare With Other Companies In The Industry?

At the time of writing, our data shows that Abacus Property Group has a market capitalization of AU$2.0b, and reported total annual CEO compensation of AU$2.2m for the year to June 2020. That's a notable increase of 14% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$1.0m.

In comparison with other companies in the industry with market capitalizations ranging from AU$1.3b to AU$4.2b, the reported median CEO total compensation was AU$1.8m. This suggests that Abacus Property Group remunerates its CEO largely in line with the industry average. Moreover, Steven Sewell also holds AU$656k worth of Abacus Property Group stock directly under their own name.

Component20202019Proportion (2020)
Salary AU$1.0m AU$1.0m 47%
Other AU$1.2m AU$929k 53%
Total CompensationAU$2.2m AU$2.0m100%

On an industry level, roughly 51% of total compensation represents salary and 49% is other remuneration. Abacus Property Group is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ASX:ABP CEO Compensation December 17th 2020

Abacus Property Group's Growth

Over the last three years, Abacus Property Group has shrunk its funds from operations (FFO) by 7.3% per year. In the last year, its revenue is down 6.1%.

Few shareholders would be pleased to read that FFO have declined. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Abacus Property Group Been A Good Investment?

With a three year total loss of 13% for the shareholders, Abacus Property Group would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we noted earlier, Abacus Property Group pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, FFO growth and total shareholder return have been negative for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 4 warning signs for Abacus Property Group that investors should look into moving forward.

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.

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