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How Much Is National Health Investors, Inc. (NYSE:NHI) Paying Its CEO?

Simply Wall St
·4 mins read

This article will reflect on the compensation paid to D. Mendelsohn who has served as CEO of National Health Investors, Inc. (NYSE:NHI) since 2015. This analysis will also look to assess whether the CEO is appropriately paid, considering recent funds from operations growth and investor returns for National Health Investors.

See our latest analysis for National Health Investors

How Does Total Compensation For D. Mendelsohn Compare With Other Companies In The Industry?

Our data indicates that National Health Investors, Inc. has a market capitalization of US$2.7b, and total annual CEO compensation was reported as US$1.8m for the year to December 2019. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$375k.

On comparing similar companies from the same industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$5.2m. Accordingly, National Health Investors pays its CEO under the industry median. Moreover, D. Mendelsohn also holds US$2.7m worth of National Health Investors stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2019

2018

Proportion (2019)

Salary

US$375k

US$350k

21%

Other

US$1.4m

US$1.5m

79%

Total Compensation

US$1.8m

US$1.8m

100%

On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. According to our research, National Health Investors has allocated a higher percentage of pay to salary in comparison to the wider industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

National Health Investors, Inc.'s Growth

National Health Investors, Inc.'s funds from operations (FFO) grew 4.2% per yearover the last three years. It achieved revenue growth of 8.8% over the last year.

We're not particularly impressed by the revenue growth, but we're happy with the modest FFO growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has National Health Investors, Inc. Been A Good Investment?

Since shareholders would have lost about 9.1% over three years, some National Health Investors, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we touched on above, National Health Investors, Inc. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But the company isn't growing and total shareholder returns have been disappointing. We're not critical of the remuneration D. receives, but it would be good to see improved returns to shareholders before compensation grows too much.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 3 warning signs (and 1 which can't be ignored) in National Health Investors we think you should know about.

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

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.