Is Bluerock Residential Growth REIT, Inc.'s (NYSEMKT:BRG) CEO Pay Justified?

By
Simply Wall St
Published
November 18, 2019

R. Kamfar became the CEO of Bluerock Residential Growth REIT, Inc. (NYSEMKT:BRG) in 2008. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Bluerock Residential Growth REIT

How Does R. Kamfar's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Bluerock Residential Growth REIT, Inc. has a market cap of US$340m, and reported total annual CEO compensation of US$4.8m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$400k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO total compensation was US$1.7m.

It would therefore appear that Bluerock Residential Growth REIT, Inc. pays R. Kamfar more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at Bluerock Residential Growth REIT has changed from year to year.

AMEX:BRG CEO Compensation, November 18th 2019

Is Bluerock Residential Growth REIT, Inc. Growing?

Bluerock Residential Growth REIT, Inc. has reduced its earnings per share by an average of 35% a year, over the last three years (measured with a line of best fit). Its revenue is up 19% over last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. 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 Bluerock Residential Growth REIT, Inc. Been A Good Investment?

With a total shareholder return of 12% over three years, Bluerock Residential Growth REIT, Inc. shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

We compared total CEO remuneration at Bluerock Residential Growth REIT, Inc. with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. And shareholder returns are decent but not great. So you may want to delve deeper, because we don't think the CEO pay is too low. Whatever your view on compensation, you might want to check if insiders are buying or selling Bluerock Residential Growth REIT shares (free trial).

If you want to buy a stock that is better than Bluerock Residential Growth REIT, this free list of high return, low debt companies is a great place to look.

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.

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