Yahoo Finance We Think Shareholders Are Less Likely To Approve A Large Pay Rise For BrightSpire Capital, Inc.'s (NYSE:BRSP) CEO For Now
Key Insights
BrightSpire Capital will host its Annual General Meeting on 16th of May
CEO Mike Mazzei's total compensation includes salary of US$800.0k
Total compensation is 74% above industry average
BrightSpire Capital's EPS grew by 83% over the past three years while total shareholder loss over the past three years was 8.4%
In the past three years, the share price of BrightSpire Capital, Inc. (NYSE:BRSP) has struggled to generate growth for its shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 16th of May. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
Check out our latest analysis for BrightSpire Capital
Comparing BrightSpire Capital, Inc.'s CEO Compensation With The Industry
Our data indicates that BrightSpire Capital, Inc. has a market capitalization of US$788m, and total annual CEO compensation was reported as US$5.8m for the year to December 2023. That's mostly flat as compared to the prior year's compensation. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$800k.
On examining similar-sized companies in the American Mortgage REITs industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$3.4m. Hence, we can conclude that Mike Mazzei is remunerated higher than the industry median. Furthermore, Mike Mazzei directly owns US$7.1m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$800k | US$800k | 14% |
Other | US$5.0m | US$5.1m | 86% |
Total Compensation | US$5.8m | US$5.9m | 100% |
On an industry level, around 14% of total compensation represents salary and 86% is other remuneration. Although there is a difference in how total compensation is set, BrightSpire Capital more or less reflects the market in terms of setting the salary. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at BrightSpire Capital, Inc.'s Growth Numbers
BrightSpire Capital, Inc. has seen its earnings per share (EPS) increase by 83% a year over the past three years. In the last year, its revenue is up 1.0%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has BrightSpire Capital, Inc. Been A Good Investment?
Given the total shareholder loss of 8.4% over three years, many shareholders in BrightSpire Capital, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for BrightSpire Capital that investors should think about before committing capital to this stock.
Important note: BrightSpire Capital 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.
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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.
