Todd Meredith has been the CEO of Healthcare Realty Trust Incorporated (NYSE:HR) since 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Todd Meredith's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Healthcare Realty Trust Incorporated has a market cap of US$4.3b, and reported total annual CEO compensation of US$3.1m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$525k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.1m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see a visual representation of the CEO compensation at Healthcare Realty Trust, below.
Is Healthcare Realty Trust Incorporated Growing?
Healthcare Realty Trust Incorporated has reduced its earnings per share by an average of 45% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 3.8%.
Few shareholders would be pleased to read that earnings per share are lower over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Healthcare Realty Trust Incorporated Been A Good Investment?
With a total shareholder return of 23% over three years, Healthcare Realty Trust Incorporated shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
It looks like Healthcare Realty Trust Incorporated pays its CEO less than similar sized companies.
Shareholders should note that compensation for Todd Meredith is under the median of a group of similar sized companies. But the business isn't growing earnings per share, and the returns to shareholders haven't been wonderful. There is room for improved company performance, but we don't see the CEO pay as a big issue here. So you may want to check if insiders are buying Healthcare Realty Trust shares with their own money (free access).
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.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned.
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