We Discuss Why First Capital Real Estate Investment Trust’s (TSE:FCR.UN) CEO Compensation May Be Closely Reviewed

The results at First Capital Real Estate Investment Trust (TSE: FCR.UN) have been pretty disappointing lately and CEO Adam Paul bears some responsibility for that. At the upcoming Annual General Meeting on June 22, 2021, shareholders will be able to hear from the Executive Board about their plans for the turnaround in performance. It would also be an opportunity for shareholders to influence management by voting on company decisions such as executive compensation, which could have a material impact on the company. We present the case why we believe CEO compensation is inconsistent with company performance.

Check out our latest analysis for First Capital Real Estate Investment Trust

How does Adam Paul’s total compensation compare to other companies in the industry?

Our data shows that First Capital Real Estate Investment Trust has a market capitalization of $ 3.9 billion and that the total annual CEO compensation for the year ended December 2020 was $ 4.4 million. That means the compensation was about the same as last year. While this analysis focuses on total compensation, it should be recognized that the salary component is lower and is estimated at CA $ 850,000.

When comparing similar companies in the same industry with market capitalizations of $ 2.4 billion to $ 7.8 billion, we found that the average total CEO compensation was $ 2.5 million. From this we can conclude that Adam Paul is paid above the industry average. In addition, Adam Paul holds CA $ 5.1 million worth of shares in the company on his own behalf, suggesting they have a lot of skin in the game.

component 2020 2019 Share (2020)
salary CA $ 850k CA $ 800k 19%
Other CAD 3.6 million CA $ 3.5 million 81%
Total compensation CA $ 4.4 million CA $ 4.3 million 100%

At the industry level, around 36% of total compensation is salary and 64% is other compensation. In the case of the First Capital Real Estate Investment Trust, non-salary compensation represents a larger proportion of total compensation compared to the broader industry. If total compensation is non-salary, this indicates that CEO compensation is linked to company performance.

TSX: FCR.UN CEO compensation June 15, 2021

A look at the First Capital Real Estate Investment Trust’s growth numbers

The Funds from Operations (FFO) of the First Capital Real Estate Investment Trust reversed their development and rose to 1.2 million CAD from -22 million CAD last year. Sales fell by 11% compared to the previous year.

Overall, this is not a very positive result for shareholders. And the fact that revenues are declining compared to last year paints an ugly picture. Given this relatively poor performance, shareholders probably wouldn’t want to see high compensation for the CEO. If you step away from the current shape for a second, this free visual representation of. to check what analysts expect for the future.

Was First Capital Real Estate Investment Trust a Good Investment?

Given the total shareholder loss of 3.4% over three years, many shareholders of First Capital Real Estate Investment Trust are likely to be dissatisfied to say the least. Hence, shareholders would likely want the company to be less generous with the CEO fee.


Not only have shareholders not received a favorable return on their investment, but business has also not done well. Few shareholders would be willing to give the CEO a raise. At the upcoming Annual General Meeting, they can question management’s plans and strategies to turn around performance and reassess their investment thesis in relation to the company.

It is always advisable to analyze CEO salaries, along with a thorough analysis of key performance areas of the company. In our study we found 5 warning signs for First Capital Real Estate Investment Trust You should be aware of this and 2 of them should not be ignored.

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