Does Clipper Realty's (NYSE:CLPR) CEO Salary Compare Well With Industry Peers?

This article will reflect on the compensation paid to David Bistricer who has served as CEO of Clipper Realty Inc. (NYSE:CLPR) since 2015. This analysis will also assess whether Clipper Realty pays its CEO appropriately, considering its funds from operations growth and total shareholder returns.

See our latest analysis for Clipper Realty

How Does Total Compensation For David Bistricer Compare With Other Companies In The Industry?

At the time of writing, our data shows that Clipper Realty Inc. has a market capitalization of US$268m, and reported total annual CEO compensation of US$1.2m for the year to December 2019. We note that's an increase of 47% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$520k.

On examining similar-sized companies in the industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$2.1m. Accordingly, Clipper Realty pays its CEO under the industry median. Furthermore, David Bistricer directly owns US$6.2m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 15% of total compensation out of all the companies we analyzed, while other remuneration made up 85% of the pie. Clipper Realty is paying a higher share of its remuneration through a salary in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Clipper Realty Inc.'s Growth

Over the past three years, Clipper Realty Inc. has seen its funds from operations (FFO) grow by 16% per year. It achieved revenue growth of 8.7% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Clipper Realty Inc. Been A Good Investment?

Given the total shareholder loss of 39% over three years, many shareholders in Clipper Realty Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As previously discussed, David is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. However we must not forget that the FFO growth has been very strong over three years. Considering FFO are on the up, we would say David is compensated fairly. Shareholders, though, would ideally like to see shareholder returns head north before they agree to any raise.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Clipper Realty that investors should be aware of in a dynamic business environment.

Switching gears from Clipper Realty, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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