How Should Investors React To Kimco Realty's (NYSE:KIM) CEO Pay?

This article will reflect on the compensation paid to Conor Flynn who has served as CEO of Kimco Realty Corporation (NYSE:KIM) since 2016. This analysis will also look to assess whether the CEO is appropriately paid, considering recent funds from operations growth and investor returns for Kimco Realty.

See our latest analysis for Kimco Realty

Comparing Kimco Realty Corporation's CEO Compensation With the industry

At the time of writing, our data shows that Kimco Realty Corporation has a market capitalization of US$4.9b, and reported total annual CEO compensation of US$6.9m for the year to December 2019. That's a notable increase of 21% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.

For comparison, other companies in the same industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$6.3m. So it looks like Kimco Realty compensates Conor Flynn in line with the median for the industry. Moreover, Conor Flynn also holds US$6.9m worth of Kimco Realty stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. Although there is a difference in how total compensation is set, Kimco Realty more or less reflects the market in terms of setting the salary. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Kimco Realty Corporation's Growth

Over the last three years, Kimco Realty Corporation has not seen its funds from operations (FFO) change much, though they have deteriorated slightly. Its revenue is down 3.4% over the previous year.

A lack of FFO improvement is not good to see. And the impression is worse when you consider revenue is down year-on-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..

Has Kimco Realty Corporation Been A Good Investment?

With a three year total loss of 29% for the shareholders, Kimco Realty Corporation would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we noted earlier, Kimco Realty pays its CEO in line with similar-sized companies belonging to the same industry. In the meantime, the company has reported declining FFO growth and shareholder returns over the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 5 warning signs for Kimco Realty you should be aware of, and 2 of them are a bit concerning.

Important note: Kimco Realty 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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