Revelations that the take-home pay of executives at diversified landlord Arrowhead Properties increased by percentages well into the double digits in 2020 should have investors in SA’s listed property sector questioning the pay of other real estate bigwigs.
Investors should question remuneration committees and ask if executives were paid bonuses in 2020 even if they took cuts to their monthly salaries due to the pandemic. This is while property funds slashed dividends, many for the first time since listing.
The listed property sector, which is worth about R300bn, may have run hard between 2010 and 2017 but it has been a dismal performer since.
In 2018 it returned a loss including dividends and share price growth of -25.26% and in 2019 it only managed 1.93%. In 2020 the effects of the pandemic caused it a total loss of 34.5%.
At the end of 2020, it was revealed that the bosses of Arrowhead had taken home hefty pay, despite shareholders experiencing their dividends slump as the pandemic hammered the company’s returns.
Arrowhead had to give rental payment relief to tenants who were struggling to earn income amid a hard lockdown imposed to curb the spread of the coronavirus.
Arrowhead — which owns a mix of second-tier industrial, office and retail assets — suffered a total loss of R844.5m in the year to September. But the take-home pay of CEO Mark Kaplan rose 14.5% in 2020, from R9.279m to R10.625m, while CFO Junaid Limalia’s pay rose 10.3%, from R6.015m to R6.635m. That’s despite the management committing to take a one-third salary cut due to the pandemic.
It’s time that investors in listed property, including the fund managers who invest our pensions, stop being so passive and ask questions about high-end pay.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.