Yahoo Finance How Should Investors Feel About Freehold Royalties Ltd.'s (TSE:FRU) CEO Pay?
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In 2013 Tom Mullane was appointed CEO of Freehold Royalties Ltd. (TSE:FRU). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Freehold Royalties
How Does Tom Mullane's Compensation Compare With Similar Sized Companies?
Our data indicates that Freehold Royalties Ltd. is worth CA$958m, and total annual CEO compensation is CA$459k. (This figure is for the year to December 2018). We note that's an increase of 12% above last year. While we always look at total compensation first, we note that the salary component is less, at CA$156k. We looked at a group of companies with market capitalizations from CA$541m to CA$2.2b, and the median CEO total compensation was CA$2.2m.
A first glance this seems like a real positive for shareholders, since Tom Mullane is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at Freehold Royalties, below.
Is Freehold Royalties Ltd. Growing?
Over the last three years Freehold Royalties Ltd. has grown its earnings per share (EPS) by an average of 97% per year (using a line of best fit). In the last year, its revenue is down -5.5%.
This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Freehold Royalties Ltd. Been A Good Investment?
Since shareholders would have lost about 21% over three years, some Freehold Royalties Ltd. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
It appears that Freehold Royalties Ltd. remunerates its CEO below most similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. Few would deny that the total shareholder return over the last three years could have been a lot better. So while we don't think, Tom Mullane is paid too much, shareholders may hope that business performance translates to investment returns before pay rises are given out.
In this case we may want to look deeper into the company. There are some real positives and we could see improved returns in the longer term. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Freehold Royalties.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
