Yahoo Finance Here's What We Think About Plaza Retail REIT's (TSE:PLZ.UN) CEO Pay
Michael Zakuta has been the CEO of Plaza Retail REIT (TSE:PLZ.UN) since 2005, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent funds from operations growth and investor returns for Plaza Retail REIT.
See our latest analysis for Plaza Retail REIT
How Does Total Compensation For Michael Zakuta Compare With Other Companies In The Industry?
Our data indicates that Plaza Retail REIT has a market capitalization of CA$351m, and total annual CEO compensation was reported as CA$400k for the year to December 2019. That's mostly flat as compared to the prior year's compensation. Notably, the salary of CA$400k is the entirety of the CEO compensation.
On examining similar-sized companies in the industry with market capitalizations between CA$132m and CA$529m, we discovered that the median CEO total compensation of that group was CA$580k. This suggests that Michael Zakuta is paid below the industry median. What's more, Michael Zakuta holds CA$35m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2019 | 2018 | Proportion (2019) |
Salary | CA$400k | CA$400k | 100% |
Other | - | - | - |
Total Compensation | CA$400k | CA$400k | 100% |
Talking in terms of the industry, salary represented approximately 33% of total compensation out of all the companies we analyzed, while other remuneration made up 67% of the pie. Speaking on a company level, Plaza Retail REIT prefers to tread along a traditional path, disbursing all compensation through a salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Plaza Retail REIT's Growth
Plaza Retail REIT's funds from operations (FFO) stayed pretty flat over the last three years. In the last year, its revenue is down 5.7%.
We would argue that the lack of revenue growth in the last year is less than ideal, but the modest FFOgrowth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Plaza Retail REIT Been A Good Investment?
With a three year total loss of 1.6% for the shareholders, Plaza Retail REIT would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
In Summary...
Plaza Retail REIT pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we noted earlier, Plaza Retail REIT pays its CEO lower than the norm for similar-sized companies belonging to the same industry. But the FFO growth is lacking, just like the returns (over three years). We're not critical of the remuneration Michael receives, but it would be good to see improved returns to shareholders before compensation grows too much.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 3 warning signs (and 2 which are significant) in Plaza Retail REIT we think you should know about.
Important note: Plaza Retail REIT 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.
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. 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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