How Much Did First Capital Real Estate Investment Trust's (TSE:FCR.UN) CEO Pocket Last Year?

This article will reflect on the compensation paid to Adam Paul who has served as CEO of First Capital Real Estate Investment Trust (TSE:FCR.UN) since 2015. This analysis will also look to assess whether the CEO is appropriately paid, considering recent funds from operations growth and investor returns for First Capital Real Estate Investment Trust.

View our latest analysis for First Capital Real Estate Investment Trust

Comparing First Capital Real Estate Investment Trust's CEO Compensation With the industry

Our data indicates that First Capital Real Estate Investment Trust has a market capitalization of CA$2.8b, and total annual CEO compensation was reported as CA$4.3m for the year to December 2019. Notably, that's an increase of 16% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$800k.

For comparison, other companies in the same industry with market capitalizations ranging between CA$1.3b and CA$4.2b had a median total CEO compensation of CA$1.9m. Hence, we can conclude that Adam Paul is remunerated higher than the industry median. What's more, Adam Paul holds CA$3.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 32% of total compensation represents salary, while the remainder of 68% is other remuneration. It's interesting to note that First Capital Real Estate Investment Trust allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

First Capital Real Estate Investment Trust's Growth

Over the last three years, First Capital Real Estate Investment Trust has shrunk its funds from operations (FFO) by 4.0% per year. Its revenue is down 7.0% over the previous year.

Few shareholders would be pleased to read that FFO have declined. 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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has First Capital Real Estate Investment Trust Been A Good Investment?

Given the total shareholder loss of 29% over three years, many shareholders in First Capital Real Estate Investment Trust are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we noted earlier, First Capital Real Estate Investment Trust pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Arguably worse, we've been waiting for positive FFO growth for the last three years. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 1 which is concerning) in First Capital Real Estate Investment Trust we think you should know about.

Important note: First Capital Real Estate Investment 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. 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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