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The anaemic share price growth at H&R Real Estate Investment Trust (TSE:HR.UN) over the past few years has probably not impressed shareholders and may be due to earnings not growing over that period. Some of these issues will occupy shareholders' minds as the AGM rolls around on 29 June 2021. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.
See our latest analysis for H&R Real Estate Investment Trust
How Does Total Compensation For Tom Hofstedter Compare With Other Companies In The Industry?
Our data indicates that H&R Real Estate Investment Trust has a market capitalization of CA$5.0b, and total annual CEO compensation was reported as CA$3.6m for the year to December 2020. That's a slight decrease of 6.5% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$1.2m.
In comparison with other companies in the industry with market capitalizations ranging from CA$2.5b to CA$7.9b, the reported median CEO total compensation was CA$2.5m. Hence, we can conclude that Tom Hofstedter is remunerated higher than the industry median. Furthermore, Tom Hofstedter directly owns CA$61m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | CA$1.2m | CA$1.2m | 33% |
| Other | CA$2.4m | CA$2.7m | 67% |
| Total Compensation | CA$3.6m | CA$3.9m | 100% |
Talking in terms of the industry, salary represented approximately 36% of total compensation out of all the companies we analyzed, while other remuneration made up 64% of the pie. There isn't a significant difference between H&R Real Estate Investment Trust and the broader market, in terms of salary allocation in the overall compensation package. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at H&R Real Estate Investment Trust's Growth Numbers
H&R Real Estate Investment Trust's funds from operations (FFO) deteriorated further this year coming in at-CA$16m at the last update, compared to last year's FFO of -CA$841k. It saw its revenue drop 1.7% over the last year.
Its a bit disappointing to see that the company has failed to grow its . This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..