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07/29/2010 (4:36 am)

executive compensation in a closely held private company Best answer on the web

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  • I am searching for comparative salary packages for a CEO of a closely
    held real estate company with annual revenues of around $3.5 million


  • This answered my question well and quickly. Thank you


  • Hi pafalafa-ga
    To try to answer your questions:
    I am interested in a single salary number or a salary plus bonus. Other perks are of lesser interest. Although a search of public companies might be more reliable, it really does not address my question. Moreover, I doubt you could find a public company with annual revenues of only $3.5 million. thanks for your question

    realty-ga


  • Hello there realty-ga,

    I might be able to help you here, but I need to ask two questions first:

    --When you say "compensation salary package", what sort of detail are you after -- s single average salary number, salary + bonus info, or some other type of info -- the more you can tell me about what you need, and how much detail, the better I can target my research.
    --the most reliable and complete sources of information would be comparable salary packages from public companies in the same line of business and with similar a revenue stream. Would that be an acceptable source of information?
    Let me know what you think. Thanks.

    pafalafa-ga


  • Hi Pafalafa-ga
    In answer to your question-- yes. I think if you can find several similar companies like Heartland, that would be satisfactory. Thanks realty-ga


  • Hello again realty-ga,

    I beg to differ. There are plenty of public, small cap, real estate companies that operate on the same scale as the company you are asking about. As one example (among many) consider Heartland Partners:
    "Heartland Partners, L.P. is a limited partnership engaged in the ownership, purchasing, development, leasing, marketing, construction and sale of real estate properties...properties of the Company designated for sale and development consisted of 10 sites comprising approximately 518 acres in 12 states."
    The company has 17 employees. It's CEO earns $196K, and it's President has a salary of $136K. Their total revenue in 2002 was $6.8 million.
    ===========

    There are a fair number of other companies like this, with revenues in the range of $1-10 million. Would you like me to summarize a range of CEO salaries for these companies, as an answer to your question?


  • Hello again realty-ga,

    I?m glad you decided that the information on small-cap public companies in the real estate sector would meet your needs. They are a valuable source of information, since SEC reporting requirements provide a wealth of information on their finances and corporate structure.
    I?ve listed below some additional real estate firms with revenues in the same ballpark as we discussed earlier. I?ve also included a brief description of the company?s operations, and executive salaries.
    Several of the firms have an unusual (to me, anyway) structure whereby their key executives receive minimal or no salaries, but fees are paid to a person or organization listed as an ?Advisor? -- these often appear to be fees in lieu of salary. Where this is the case, I?ve provided details on the Advisor?s compensation.
    I hope this is the information you need. If anything here is unclear -- or if you simply need additional information -- just let me know by posting a Request for Clarification, and I?ll be happy to assist you further.
    pafalafa-ga

    ==========

    http://finance.yahoo.com/q/pr?s=igc
    Interstate General Co LP

    Interstate General Company, L.P. (IGC) develops and sells residential and commercial land and is engaged in the development of waste recycling projects that use environmental technology.
    Revenue $4.5 million

    CEO -- $487K
    Pres --$457K


    =====

    http://finance.yahoo.com/q/pr?s=AMEN
    AMEN Properties, Inc


    AMEN Properties, Inc. is engaged in the acquisition of cash-generating assets, consisting primarily of office buildings in secondary stagnant markets, office buildings in out-of-favor growth markets and oil and gas royalties. Through subsidiaries, it has a commercial real estate portfolio consisting of majority ownership in two office properties located in Midland and Lubbock, Texas, as well as an investment interest in an oil and gas royalty trust
    Revenues: $1.0 million in 2002 ($4.5 million in 2001)

    Salary information was gleaned from the company?s annual and proxy reports on file at the SEC:
    http://www.sec.gov/Archives/edgar/data/1037599/000115752303001014/0001157523-03-001014.txt
    President -- $278K
    CFO -- $123K

    =====

    http://finance.yahoo.com/q/pr?s=IHT
    Innsuites Hospitality Trust

    InnSuites Hospitality Trust operates as an unincorporated Ohio real estate investment trust (REIT). As of January 31, 2003, the Company owned a 50.80% sole general partner interest in RRF Limited Partnership, (the Partnership). As of January 31, 2003, the Partnership owned 11 InnSuites hotels located in Arizona, New Mexico and southern California.
    Revenue $26.9 million

    CEO -- $95K
    CFO -- $129K

    =====

    http://finance.yahoo.com/q/pr?s=azl

    Arizona Land Income Corporation
    Arizona Land Income Corporation is a real estate investment trust (REIT).

    Revenue $643,000 (in 2001)

    CEO -- $4K

    http://www.sec.gov/Archives/edgar/data/830748/000095014703000458/0000950147-03-000458.txt


    COMPENSATION OF OFFICERS AND DIRECTORS

    The Company has no salaried employees. In return for their services as
    Unaffiliated Directors of the Company, Messrs. Freireich and Blackwell receive
    an annual fee of $10,000, a meeting fee of $400 for each meeting the Board of
    Directors attended, and a fee of $100 for each meeting of the Board conducted by
    telephone. Mr. Hislop does not receive compensation for his services as a
    director of the Company. The Company reimburses all directors for expenses
    incurred in connection with their duties as directors of the Company.


    ...the Company pays the Advisor a servicing fee for servicing the
    Company's first mortgage loans... During 2002, the Company paid the Advisor a servicing fee of $17,281...The Company has also agreed to pay the Advisor an advisory fee for aiding the Company in developing investment policies and analyzing and recommending investments to the Company. The advisory fee is payable in any quarter at the
    end of which the shareholders' cumulative return on capital investment as of the
    end of such quarter exceeds 12.7%. Such advisory fee, when payable, will equal
    30% of the Company's available cash in excess of that necessary to provide
    shareholders with a cumulative return on capital investment in excess of 12.7%.
    To date, the Company has not accrued or paid an advisory fee to the Advisor.



    =====

    http://finance.yahoo.com/q/pr?s=hmg
    HMG/Courtland Properties Inc.

    HMG/Courtland Properties Inc. is a real estate investment trust (REIT) engaged in the ownership and management of income-producing commercial properties. Properties owned by the Company include a hotel, private club and marina located in Coconut Grove, Florida; a shopping center in Jacksonville, Florida, and undeveloped land in Houston, Texas, and Rhode Island.
    Revenue $2.4 million

    Executive compensation -- $924K

    http://www.sec.gov/Archives/edgar/data/311817/000095015902000200/0000950159-02-000200.txt
    The Company has one employee who is a vice president of the Company and of HMG
    Advisory Corp. (the "Advisor"). ...the Advisor is entitled to receive a monthly fee of $55,000. The Advisor is also entitled to annual incentive compensation equal to
    the sum of 10% of net realized capital gains and extraordinary items of income
    for that year and 10% of the amount, if any, by which net profits of the Company
    for such fiscal year exceeded 8% per annum of the Average Net Worth of the
    Company, as defined. The Advisor also is entitled to a monthly fee of 20% of the
    amount of any unrefunded commitment fees received by the Company with respect to
    mortgage loans and other commitments which the Company was not required to fund
    and which expired within the next preceding calendar month.

    Advisory Fees. For the years ended December 31, 2001 and 2000, the Company and
    its subsidiaries paid the Advisor approximately $924,000 and $993,000 in fees,
    respectively, of which $660,000 represented regular compensation and
    approximately $264,000 and $333,000 represented incentive compensation,
    respectively. The Advisor is also the manager for certain of the Company's
    affiliates and received management fees of approximately $30,000 in 2001 and
    2000 for such services. Furthermore, for fiscal years 2001 and 2000 the Company
    paid approximately $60,000 to one of the Company's officers in his capacity as
    project manager for a specific property, as described above.


    =====

    http://finance.yahoo.com/q/pr?s=gta
    Golf Trust of America Inc

    Golf Trust of America Inc. (GTA) was originally formed to capitalize upon consolidation opportunities in the ownership of upscale golf courses throughout the United States.
    Revenue $20.4 million

    CEO -- $365K
    CFO -- $203K

    =====

    http://finance.yahoo.com/q/pr?s=aqq
    American Spectrum Realty, Inc

    American Spectrum Realty, Inc. is a full-service real estate corporation that owns, manages and operates income-producing properties.
    Revenue $8.5 million (2001)

    CEO -- $481K
    COO -- $280K
    Sr VP - $222K
    Sr VP - $293K

    =====

    http://finance.yahoo.com/q/pr?s=hgpi
    Horizon Group Properties, Inc


    Horizon Group Properties, Inc. (HGPI) is a self-administered and self-managed real estate investment trust (REIT) that was established in connection with the merger of Horizon Group, Inc. (Horizon) with and into Prime Retail, Inc. (the Merger). The Company's initial portfolio consisted of 14 factory outlet centers and one power center located in 12 states.
    Revenues $17.9 million

    CEO $292K
    CFO $213K
    Sr VP of Leasing $198K
    Sr VP of Asset and Property Mgmt $175K

    =====

    Again, if anything here needs elaboration, just let me know and I?ll be happy to help as best I can.
    Best of luck in your ventures.

    pafalafa-ga


    search strategy:
    Relied on bookmarked sites -- Datek.com to screen small cap real estate stocks. Yahoo Finance to access basic financial information on the companies of interest. SEC?s Edgar search system to access company annual reports and related information.


  • Thanks, realty-ga. Glad this worked out so well.

    Have a great holiday season and new year.

    pafalafa-ga









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