Shareholders May Be Wary Of Increasing Arbor Realty Trust, Inc.'s (NYSE:ABR) CEO Compensation Package

Key Insights

• Arbor Realty Trust to hold its Annual General Meeting on 21st of May
• Total pay for CEO Ivan Kaufman includes US$1.20m salary
• Total compensation is 92% above industry average
• Over the past three years, Arbor Realty Trust's EPS fell by 22% and over the past three years, the total loss to shareholders 9.0%

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Shareholders will probably not be too impressed with the underwhelming results at Arbor Realty Trust, Inc. (NYSE:ABR) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 21st of May. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Arbor Realty Trust

How Does Total Compensation For Ivan Kaufman Compare With Other Companies In The Industry?

According to our data, Arbor Realty Trust, Inc. has a market capitalization of US$2.2b, and paid its CEO total annual compensation worth US$12m over the year to December 2024. This means that the compensation hasn't changed much from last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.2m.

On comparing similar companies from the American Mortgage REITs industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$6.3m. Hence, we can conclude that Ivan Kaufman is remunerated higher than the industry median. Moreover, Ivan Kaufman also holds US$20m worth of Arbor Realty Trust stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 13% of total compensation represents salary, while the remainder of 87% is other remuneration. Arbor Realty Trust sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Arbor Realty Trust, Inc.'s Growth Numbers

Over the last three years, Arbor Realty Trust, Inc. has shrunk its earnings per share by 22% per year. Its revenue is down 13% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-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 Arbor Realty Trust, Inc. Been A Good Investment?

Given the total shareholder loss of 9.0% over three years, many shareholders in Arbor Realty Trust, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Arbor Realty Trust that you should be aware of before investing.

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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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.