Scott Pritchard became the CEO of Precinct Properties New Zealand Limited (NZSE:PCT) in 2010, 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 assess whether Precinct Properties New Zealand pays its CEO appropriately, considering its funds from operations growth and total shareholder returns.
How Does Total Compensation For Scott Pritchard Compare With Other Companies In The Industry?
At the time of writing, our data shows that Precinct Properties New Zealand Limited has a market capitalization of NZ$2.3b, and reported total annual CEO compensation of NZ$1.8m for the year to June 2020. That's a fairly small increase of 3.6% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at NZ$540k.
On examining similar-sized companies in the industry with market capitalizations between NZ$1.5b and NZ$4.8b, we discovered that the median CEO total compensation of that group was NZ$1.8m. This suggests that Precinct Properties New Zealand remunerates its CEO largely in line with the industry average. Furthermore, Scott Pritchard directly owns NZ$2.5m worth of shares in the company, implying that they are deeply invested in the company's success.
Speaking on an industry level, salary and non-salary portions, both make up 50% each of the total remuneration. Precinct Properties New Zealand sets aside a smaller share of compensation for 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.
Precinct Properties New Zealand Limited's Growth
Over the past three years, Precinct Properties New Zealand Limited has seen its funds from operations (FFO) grow by 3.8% per year. Its revenue is up 12% over the last year.
We would argue that the modest growth in revenue is a notable positive. And, while modest, the FFO growth is noticeable. So while we'd stop just short of calling this a top performer, but we think it is well 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 Precinct Properties New Zealand Limited Been A Good Investment?
We think that the total shareholder return of 53%, over three years, would leave most Precinct Properties New Zealand Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As we touched on above, Precinct Properties New Zealand Limited 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. But the business isn't reporting great numbers in terms of FFO growth. At the same time, shareholder returns have remained strong over the same period. We would like to see FFO growth from the business, although we wouldn't say the CEO compensation is high.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 1 which is significant) in Precinct Properties New Zealand we think you should know about.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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