How Is Armada Hoffler Properties' (NYSE:AHH) CEO Paid Relative To Peers?

This article will reflect on the compensation paid to Lou Haddad who has served as CEO of Armada Hoffler Properties, Inc. (NYSE:AHH) since 2012. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Armada Hoffler Properties

How Does Total Compensation For Lou Haddad Compare With Other Companies In The Industry?

At the time of writing, our data shows that Armada Hoffler Properties, Inc. has a market capitalization of US$814m, and reported total annual CEO compensation of US$2.1m for the year to December 2019. That's a notable increase of 25% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$940k.

On comparing similar companies from the same industry with market caps ranging from US$400m to US$1.6b, we found that the median CEO total compensation was US$4.0m. This suggests that Lou Haddad is paid below the industry median. Moreover, Lou Haddad also holds US$25m worth of Armada Hoffler Properties stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

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. Armada Hoffler Properties pays out 44% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Armada Hoffler Properties, Inc.'s Growth

Earnings per share at Armada Hoffler Properties, Inc. are much the same as they were three years ago, albeit slightly lower. It achieved revenue growth of 70% over the last year.

The decrease in earnings could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Armada Hoffler Properties, Inc. Been A Good Investment?

Given the total shareholder loss of 6.7% over three years, many shareholders in Armada Hoffler Properties, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, Armada Hoffler Properties pays its CEO lower than the norm for similar-sized companies belonging to the same industry. But shareholder returns and earnings growth over the past three years are negative, which is cause for concern. In contrast, revenues have increased more recently. So, although Lou is modestly paid, shareholders might want to see positive shareholder returns before warming to the idea of a raise.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 6 warning signs for Armada Hoffler Properties (2 don't sit too well with us!) that you should be aware of before investing here.

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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