Shareholders May Be A Bit More Conservative With Firm Capital Property Trust's (TSE:FCD.UN) CEO Compensation For Now

Key Insights

• Firm Capital Property Trust will host its Annual General Meeting on 20th of June
• Salary of CA$512.6k is part of CEO Bob McKee's total remuneration
• Total compensation is similar to the industry average
• Over the past three years, Firm Capital Property Trust's FFO grew by 65% per year and over the past three years, the total loss to shareholders 7.5%

In the past three years, the share price of Firm Capital Property Trust (TSE:FCD.UN) has struggled to generate growth for its shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 20th of June. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Firm Capital Property Trust

Comparing Firm Capital Property Trust's CEO Compensation With The Industry

According to our data, Firm Capital Property Trust has a market capitalization of CA$185m, and paid its CEO total annual compensation worth CA$513k over the year to December 2023. That's mostly flat as compared to the prior year's compensation. It is worth noting that the CEO compensation consists entirely of the salary, worth CA$513k.

For comparison, other companies in the Canadian REITs industry with market capitalizations below CA$275m, reported a median total CEO compensation of CA$513k. From this we gather that Bob McKee is paid around the median for CEOs in the industry. Furthermore, Bob McKee directly owns CA$735k worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	CA$513k	CA$487k	100%
Other	-	CA$24k	-
Total Compensation	CA$513k	CA$512k	100%

Speaking on an industry level, nearly 52% of total compensation represents salary, while the remainder of 48% is other remuneration. Speaking on a company level, Firm Capital Property Trust prefers to tread along a traditional path, disbursing all compensation through a salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Firm Capital Property Trust's Growth

Firm Capital Property Trust's funds from operations (FFO) grew 65% per yearover the last three years. In the last year, its revenue is up 6.2%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Firm Capital Property Trust Been A Good Investment?

Given the total shareholder loss of 7.5% over three years, many shareholders in Firm Capital Property Trust are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Firm Capital Property Trust rewards its CEO solely through a salary, ignoring non-salary benefits completely. Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

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 2 warning signs for Firm Capital Property Trust that investors should look into moving forward.

Important note: Firm Capital Property Trust is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com