How Much Is Morguard Real Estate Investment Trust (TSE:MRT.UN) Paying Its CEO?

Simply Wall St
August 31, 2020

This article will reflect on the compensation paid to Kuldip Sahi who has served as CEO of Morguard Real Estate Investment Trust (TSE:MRT.UN) since 2001. This analysis will also assess whether Morguard Real Estate Investment Trust pays its CEO appropriately, considering its funds from operations growth and total shareholder returns.

See our latest analysis for Morguard Real Estate Investment Trust

How Does Total Compensation For Kuldip Sahi Compare With Other Companies In The Industry?

Our data indicates that Morguard Real Estate Investment Trust has a market capitalization of CA$301m, and total annual CEO compensation was reported as CA$100k for the year to December 2019. This means that the compensation hasn't changed much from last year. It is worth noting that the CEO compensation consists entirely of the salary, worth CA$100k.

On comparing similar companies from the same industry with market caps ranging from CA$131m to CA$524m, we found that the median CEO total compensation was CA$580k. In other words, Morguard Real Estate Investment Trust pays its CEO lower than the industry median. Moreover, Kuldip Sahi also holds CA$5.9m worth of Morguard Real Estate Investment Trust stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20192018Proportion (2019)
Salary CA$100k CA$100k 100%
Other - - -
Total CompensationCA$100k CA$100k100%

On an industry level, around 33% of total compensation represents salary and 67% is other remuneration. On a company level, Morguard Real Estate Investment Trust prefers to reward its CEO through a salary, opting not to pay Kuldip Sahi through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

TSX:MRT.UN CEO Compensation August 31st 2020

A Look at Morguard Real Estate Investment Trust's Growth Numbers

Over the last three years, Morguard Real Estate Investment Trust has shrunk its funds from operations (FFO) by 8.1% per year. It saw its revenue drop 5.5% over the last year.

The decline in FFO is a bit concerning. 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. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Morguard Real Estate Investment Trust Been A Good Investment?

With a three year total loss of 56% for the shareholders, Morguard Real Estate Investment Trust would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Morguard Real Estate Investment Trust rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we touched on above, Morguard Real Estate Investment Trust is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. While we are quite underwhelmed with FFO growth, the shareholder returns over the past three years have also failed to impress us. Although we wouldn’t say CEO compensation is high, it’s tough to foresee shareholders warming up to thoughts of a bump anytime soon.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 4 warning signs for Morguard Real Estate Investment Trust (of which 2 are potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Important note: Morguard 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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