How Does Cominar Real Estate Investment Trust's (TSE:CUF.UN) CEO Pay Compare With Company Performance?

Simply Wall St
September 14, 2020

This article will reflect on the compensation paid to Sylvain Cossette who has served as CEO of Cominar Real Estate Investment Trust (TSE:CUF.UN) since 2018. This analysis will also look to assess whether the CEO is appropriately paid, considering recent funds from operations growth and investor returns for Cominar Real Estate Investment Trust.

Check out our latest analysis for Cominar Real Estate Investment Trust

How Does Total Compensation For Sylvain Cossette Compare With Other Companies In The Industry?

At the time of writing, our data shows that Cominar Real Estate Investment Trust has a market capitalization of CA$1.3b, and reported total annual CEO compensation of CA$2.7m for the year to December 2019. Notably, that's an increase of 12% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$725k.

For comparison, other companies in the same industry with market capitalizations ranging between CA$527m and CA$2.1b had a median total CEO compensation of CA$1.6m. Hence, we can conclude that Sylvain Cossette is remunerated higher than the industry median. Furthermore, Sylvain Cossette directly owns CA$314k worth of shares in the company.

Component20192018Proportion (2019)
Salary CA$725k CA$725k 27%
Other CA$2.0m CA$1.7m 73%
Total CompensationCA$2.7m CA$2.4m100%

On an industry level, roughly 33% of total compensation represents salary and 67% is other remuneration. Cominar Real Estate Investment Trust pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

TSX:CUF.UN CEO Compensation September 14th 2020

Cominar Real Estate Investment Trust's Growth

Over the last three years, Cominar Real Estate Investment Trust has shrunk its funds from operations (FFO) by 13% per year. It saw its revenue drop 3.8% over the last year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Cominar Real Estate Investment Trust Been A Good Investment?

Since shareholders would have lost about 35% over three years, some Cominar Real Estate Investment Trust investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we touched on above, Cominar Real Estate Investment Trust is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. What's equally worrying is that the company isn't growing by our analysis. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for Cominar Real Estate Investment Trust (2 don't sit too well with us!) that you should be aware of before investing here.

Switching gears from Cominar Real Estate Investment Trust, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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