How Should Investors React To Morguard Real Estate Investment Trust’s (TSE:MRT.UN) CEO Pay?

This article will look at the compensation paid to Kuldip Sahi who served as CEO of Morguard Real Estate Investment Trust (TSE: MRT.UN) since 2001. This analysis also evaluates whether the Morguard Real Estate Investment Trust pays its CEO appropriately, taking into account operational growth and total shareholder return.

Check out our latest analysis for Morguard Real Estate Investment Trust

Morguard Real Estate Investment Trust CEO compensation compared to the industry

At the time of writing, our data shows that the Morguard Real Estate Investment Trust has a market capitalization of CA $ 344 million and has a total annual CEO compensation of CA $ 100,000 for the year ended December 2019. This is largely unchanged compared to the previous year. In particular, the CA $ 100,000 salary is the entirety of the CEO’s compensation.

Compared to other companies in the industry with market caps between CA $ 128 million and CA $ 511 million, the reported median total CEO compensation was CA $ 400,000. Accordingly, Morguard Real Estate Investment Trust pays its CEO below the industry median. In addition, Kuldip Sahi holds Morguard Real Estate Investment Trust shares worth CA $ 6.6 million directly under their own name, which shows us that they have a significant personal interest in the company.

component 2019 2018 Share (2019)
salary CA $ 100,000 CA $ 100,000 100%
Other – – – – – –
Total compensation CA $ 100,000 CA $ 100,000 100%

At the industry level, around 32% of total compensation corresponds to salary and 68% to other compensation. At the corporate level, Morguard Real Estate Investment Trust prefers to reward its CEO with a salary and chooses not to pay Kuldip Sahi through non-salary benefits. When salary dominates total compensation, it suggests that CEO compensation is less based on the variable component normally associated with performance.

TSX: MRT.UN CEO Compensation December 15, 2020

Morguard Real Estate Investment Trust grows

Morguard Real Estate Investment Trust has reduced its Funds from Operations (FFO) by 11% per year over the past three years. Last year sales fell by 7.2%.

The decline in FFO is somewhat worrying. In addition, sales actually fell compared to the previous year. Given this relatively poor performance, shareholders probably wouldn’t want high compensation for the CEO. Whenever you step away from the current shape for a second it may be important to check out this free visual representation of what analysts expect for the future.

Was Morguard Real Estate Investment Trust a Good Investment?

With a total three-year loss for shareholders of 48%, Morguard Real Estate Investment Trust would certainly have some unhappy shareholders. As such, shareholders likely want the company to be as generous as possible with CEO compensation.

In total…

The Morguard Real Estate Investment Trust only rewards its CEO with a salary, completely ignoring non-salary benefits. As mentioned earlier, Kuldip is paid less than is common for CEOs of similar sized companies belonging to the same industry. For the past three years, shareholder returns have been downright disappointing, and FFO growth has been just as disappointing. While we wouldn’t say the CEO’s compensation is high, it’s difficult to predict that shareholders will soon heat up to thoughts of a bump.

We can learn a lot about a company by examining its CEOs’ compensation trends and looking at other aspects of the business. We researched and identified 3 warning signs (and 2 that shouldn’t be ignored) at Morguard Real Estate Investment Trust you should know about this.

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This article from Simply Wall St is of a general nature. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. We want to provide you with a long-term, focused analysis based on fundamental data. Note that our analysis may not take into account the latest price sensitive company announcements or quality materials. Simply Wall St has no position in the stocks mentioned.
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