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Here's Why Shareholders May Want To Be Cautious With Increasing Precinct Properties New Zealand Limited's (NZSE:PCT) CEO Pay Packet

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Under the guidance of CEO Scott Pritchard, Precinct Properties New Zealand Limited (NZSE:PCT) has performed reasonably well recently. As shareholders go into the upcoming AGM on 03 November 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Precinct Properties New Zealand

How Does Total Compensation For Scott Pritchard Compare With Other Companies In The Industry?

Our data indicates that Precinct Properties New Zealand Limited has a market capitalization of NZ$2.6b, and total annual CEO compensation was reported as NZ$2.6m for the year to June 2021. That's a notable increase of 42% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at NZ$620k.

For comparison, other companies in the same industry with market capitalizations ranging between NZ$1.4b and NZ$4.4b had a median total CEO compensation of NZ$1.5m. Accordingly, our analysis reveals that Precinct Properties New Zealand Limited pays Scott Pritchard north of the industry median. What's more, Scott Pritchard holds NZ$810k worth of shares in the company in their own name.

Component

2021

2020

Proportion (2021)

Salary

NZ$620k

NZ$540k

24%

Other

NZ$2.0m

NZ$1.3m

76%

Total Compensation

NZ$2.6m

NZ$1.8m

100%

Talking in terms of the industry, salary represented approximately 45% of total compensation out of all the companies we analyzed, while other remuneration made up 55% of the pie. It's interesting to note that Precinct Properties New Zealand allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

A Look at Precinct Properties New Zealand Limited's Growth Numbers

Over the past three years, Precinct Properties New Zealand Limited has seen its funds from operations (FFO) grow by 5.0% per year. It achieved revenue growth of 32% over the last year.

We like the look of the strong year-on-year improvement in revenue. With that in mind, the modestly improving FFO seems positive. We wouldn't say this is necessarily top notch growth, but it is certainly promising. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Precinct Properties New Zealand Limited Been A Good Investment?

Precinct Properties New Zealand Limited has served shareholders reasonably well, with a total return of 31% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

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. We did our research and identified 4 warning signs (and 1 which is concerning) in Precinct Properties New Zealand we think you should know about.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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