U.S. Markets close in 3 mins

Is Healthcare Realty Trust Incorporated's (NYSE:HR) CEO Paid Enough Relative To Peers?

Simply Wall St

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

In 2016 Todd Meredith was appointed CEO of Healthcare Realty Trust Incorporated (NYSE:HR). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Healthcare Realty Trust

How Does Todd Meredith's Compensation Compare With Similar Sized Companies?

According to our data, Healthcare Realty Trust Incorporated has a market capitalization of US$4.3b, and pays its CEO total annual compensation worth US$3.1m. (This figure is for the year to December 2018). That's below the compensation, last year. We think total compensation is more important but we note that the CEO salary is lower, at US$525k. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO total compensation was US$5.2m.

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.

NYSE:HR CEO Compensation, June 20th 2019

Is Healthcare Realty Trust Incorporated Growing?

On average over the last three years, Healthcare Realty Trust Incorporated has shrunk earnings per share by 30% each year (measured with a line of best fit). It achieved revenue growth of 4.3% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.

Has Healthcare Realty Trust Incorporated Been A Good Investment?

With a total shareholder return of 12% 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.

In Summary...

It looks like Healthcare Realty Trust Incorporated pays its CEO less than similar sized companies.

The compensation paid to Todd Meredith is lower than is usual at similar sized companies. However, the earnings per share are not moving in the right direction, and the returns to shareholders could have been better. So while shareholders shouldn't be overly concerned about CEO compensation, we suspect most would prefer see improved performance, before increasing pay. Shareholders may want to check for free if Healthcare Realty Trust insiders are buying or selling shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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. Thank you for reading.