Shareholders May Not Be So Generous With Ladder Capital Corp's (NYSE:LADR) CEO Compensation And Here's Why

Key Insights

• Ladder Capital will host its Annual General Meeting on 6th of June
• CEO Brian Harris' total compensation includes salary of US$1.00m
• The overall pay is 347% above the industry average
• Over the past three years, Ladder Capital's EPS grew by 289% and over the past three years, the total shareholder return was 18%

Under the guidance of CEO Brian Harris, Ladder Capital Corp (NYSE:LADR) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 6th of June. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Ladder Capital

Comparing Ladder Capital Corp's CEO Compensation With The Industry

Our data indicates that Ladder Capital Corp has a market capitalization of US$1.4b, and total annual CEO compensation was reported as US$15m for the year to December 2023. We note that's an increase of 20% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.0m.

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$3.4m. Hence, we can conclude that Brian Harris is remunerated higher than the industry median. Furthermore, Brian Harris directly owns US$86m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$1.0m	US$1.0m	7%
Other	US$14m	US$12m	93%
Total Compensation	US$15m	US$13m	100%

Speaking on an industry level, nearly 14% of total compensation represents salary, while the remainder of 86% is other remuneration. Ladder Capital pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Ladder Capital Corp's Growth

Ladder Capital Corp has seen its earnings per share (EPS) increase by 289% a year over the past three years. It saw its revenue drop 23% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Ladder Capital Corp Been A Good Investment?

Ladder Capital Corp has generated a total shareholder return of 18% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

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. We did our research and spotted 2 warning signs for Ladder Capital that investors should look into moving forward.

Important note: Ladder Capital 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.