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How Should Investors React To Healthcare Trust of America, Inc.'s (NYSE:HTA) CEO Pay?

Simply Wall St

Scott Peters became the CEO of Healthcare Trust of America, Inc. (NYSE:HTA) in 2006. 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Healthcare Trust of America

How Does Scott Peters's Compensation Compare With Similar Sized Companies?

According to our data, Healthcare Trust of America, Inc. has a market capitalization of US$6.0b, and pays its CEO total annual compensation worth US$8.5m. (This is based on the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$900k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$6.3m.

Thus we can conclude that Scott Peters receives more in total compensation than the median of a group of companies in the same market, and of similar size to Healthcare Trust of America, Inc.. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at Healthcare Trust of America has changed from year to year.

NYSE:HTA CEO Compensation, April 12th 2019

Is Healthcare Trust of America, Inc. Growing?

On average over the last three years, Healthcare Trust of America, Inc. has grown earnings per share (EPS) by 48% each year (using a line of best fit). Its revenue is up 14% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Healthcare Trust of America, Inc. Been A Good Investment?

With a total shareholder return of 11% over three years, Healthcare Trust of America, Inc. shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

We compared the total CEO remuneration paid by Healthcare Trust of America, Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However we must not forget that the EPS growth has been very strong over three years. Looking at the same time period, we think that the shareholder returns are respectable. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. Shareholders may want to check for free if Healthcare Trust of America insiders are buying or selling shares.

Important note: Healthcare Trust of America may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.