Is Sun Communities, Inc.’s (NYSE:SUI) CEO Being Overpaid?

Gary Shiffman is the CEO of Sun Communities, Inc. (NYSE:SUI). This analysis aims first to contrast CEO compensation with other large companies. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Sun Communities

How Does Gary Shiffman’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Sun Communities, Inc. has a market cap of US$10b, and is paying total annual CEO compensation of US$14m. (This figure is for the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at US$692k. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO compensation to be US$11m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

So Gary Shiffman is paid around the average of the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at Sun Communities has changed from year to year.

NYSE:SUI CEO Compensation, March 8th 2019
NYSE:SUI CEO Compensation, March 8th 2019

Is Sun Communities, Inc. Growing?

On average over the last three years, Sun Communities, Inc. has shrunk earnings per share by 32% each year (measured with a line of best fit). Its revenue is up 15% over last year.

Unfortunately, earnings per share have trended lower over the last three years. There’s no doubt that the silver lining is that revenue is up. But it isn’t sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.

Has Sun Communities, Inc. Been A Good Investment?

Boasting a total shareholder return of 90% over three years, Sun Communities, Inc. 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…

Remuneration for Gary Shiffman is close enough to the median pay for a CEO of a large company .

We’re not seeing great strides in earnings per share, but the company has clearly pleased some investors, given the returns over the last three years. So we think most shareholders wouldn’t be too worried about CEO compensation, which is close to the median for large companies. Whatever your view on compensation, you might want to check if insiders are buying or selling Sun Communities shares (free trial).

Important note: Sun Communities may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.