Here's Why Shareholders Will Not Be Complaining About AMREP Corporation's (NYSE:AXR) CEO Pay Packet

We have been pretty impressed with the performance at AMREP Corporation (NYSE:AXR) recently and CEO Chris Vitale deserves a mention for their role in it. Coming up to the next AGM on 09 September 2021, shareholders would be keeping this in mind. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is not extravagant.

See our latest analysis for AMREP

How Does Total Compensation For Chris Vitale Compare With Other Companies In The Industry?

At the time of writing, our data shows that AMREP Corporation has a market capitalization of US$101m, and reported total annual CEO compensation of US$426k for the year to April 2021. This means that the compensation hasn't changed much from last year. Notably, the salary which is US$325.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$328k. This suggests that AMREP remunerates its CEO largely in line with the industry average. Furthermore, Chris Vitale directly owns US$1.4m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	US$325k	US$325k	76%
Other	US$101k	US$111k	24%
Total Compensation	US$426k	US$436k	100%

Speaking on an industry level, nearly 29% of total compensation represents salary, while the remainder of 71% is other remuneration. It's interesting to note that AMREP pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at AMREP Corporation's Growth Numbers

AMREP Corporation's earnings per share (EPS) grew 52% per year over the last three years. Its revenue is up 113% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has AMREP Corporation Been A Good Investment?

Boasting a total shareholder return of 127% over three years, AMREP Corporation has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given the improved performance, shareholders may be more forgiving of CEO compensation in the upcoming AGM. However, despite the strong growth in earnings and share price growth, the focus for shareholders would be how the company plans to steer the company towards sustainable profitability in the near future.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for AMREP that you should be aware of before investing.

Important note: AMREP 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.
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