In 2012 Rai Sahi was appointed CEO of Morguard North American Residential Real Estate Investment Trust (TSE:MRG.UN). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Rai Sahi’s Compensation Compare With Similar Sized Companies?
According to our data, Morguard North American Residential Real Estate Investment Trust has a market capitalization of CA$925m, and pays its CEO total annual compensation worth CA$544k. (This figure is for the year to December 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at CA$222k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CA$537m to CA$2.1b. The median total CEO compensation was CA$1.9m.
A first glance this seems like a real positive for shareholders, since Rai Sahi is paid less than the average compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Morguard North American Residential Real Estate Investment Trust has changed from year to year.
Is Morguard North American Residential Real Estate Investment Trust Growing?
Over the last three years Morguard North American Residential Real Estate Investment Trust has grown its earnings per share (EPS) by an average of 73% per year (using a line of best fit). Its revenue is up 7.0% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see modest revenue growth, suggesting the underlying business is healthy. Shareholders might be interested in this free visualization of analyst forecasts.
Has Morguard North American Residential Real Estate Investment Trust Been A Good Investment?
Most shareholders would probably be pleased with Morguard North American Residential Real Estate Investment Trust for providing a total return of 75% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
It looks like Morguard North American Residential Real Estate Investment Trust pays its CEO less than similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. The strong history of shareholder returns might even have some thinking that Rai Sahi deserves a raise!
It’s not often we see shareholders do so well, and yet the CEO is paid modestly. The cherry on top would be if company insiders are buying shares with their own money. Shareholders may want to check for free if Morguard North American Residential Real Estate Investment Trust insiders are buying or selling shares.
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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