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Does Killam Apartment Real Estate Investment Trust's (TSE:KMP.UN) CEO Salary Compare Well With Industry Peers?

Philip Fraser became the CEO of Killam Apartment Real Estate Investment Trust (TSE:KMP.UN) in 2000, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the funds from operations and shareholder returns of the company.

See our latest analysis for Killam Apartment Real Estate Investment Trust

How Does Total Compensation For Philip Fraser Compare With Other Companies In The Industry?

According to our data, Killam Apartment Real Estate Investment Trust has a market capitalization of CA$1.8b, and paid its CEO total annual compensation worth CA$1.7m over the year to December 2019. We note that's a small decrease of 4.4% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$650k.

In comparison with other companies in the industry with market capitalizations ranging from CA$1.3b to CA$4.3b, the reported median CEO total compensation was CA$1.9m. This suggests that Killam Apartment Real Estate Investment Trust remunerates its CEO largely in line with the industry average. Furthermore, Philip Fraser directly owns CA$7.2m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2019

2018

Proportion (2019)

Salary

CA$650k

CA$650k

37%

Other

CA$1.1m

CA$1.2m

63%

Total Compensation

CA$1.7m

CA$1.8m

100%

Speaking on an industry level, nearly 33% of total compensation represents salary, while the remainder of 67% is other remuneration. According to our research, Killam Apartment Real Estate Investment Trust has allocated a higher percentage of pay to salary in comparison to the wider industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

A Look at Killam Apartment Real Estate Investment Trust's Growth Numbers

Over the past three years, Killam Apartment Real Estate Investment Trust has seen its funds from operations (FFO) grow by 16% per year. In the last year, its revenue is up 9.8%.

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. 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 Killam Apartment Real Estate Investment Trust Been A Good Investment?

We think that the total shareholder return of 46%, over three years, would leave most Killam Apartment Real Estate Investment Trust shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

As we touched on above, Killam Apartment Real Estate Investment Trust is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The company is growing FFO and total shareholder returns have been pleasing. Indeed, many might consider that Philip is compensated rather modestly, given the solid company performance! Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.

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. In our study, we found 3 warning signs for Killam Apartment Real Estate Investment Trust you should be aware of, and 1 of them is potentially serious.

Important note: Killam Apartment Real Estate Investment Trust 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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