D. Mendelsohn has been the CEO of National Health Investors, Inc. (NYSE:NHI) since 2015. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does D. Mendelsohn’s Compensation Compare With Similar Sized Companies?
Our data indicates that National Health Investors, Inc. is worth US$3.3b, and total annual CEO compensation is US$1.7m. (This number is for the twelve months until 2017). While we always look at total compensation first, we note that the salary component is less, at US$340k. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO compensation was US$5.2m.
A first glance this seems like a real positive for shareholders, since D. Mendelsohn is paid less than the average compensation paid by similar sized companies. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
You can see, below, how CEO compensation at National Health Investors has changed over time.
Is National Health Investors, Inc. Growing?
National Health Investors, Inc. has reduced its earnings per share by an average of 1.1% a year, over the last three years. Its revenue is up 7.0% over last year.
The lack of earnings per share growth in the last three years is unimpressive. 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.
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?
I think that the total shareholder return of 46%, over three years, would leave most National Health Investors, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
It appears that National Health Investors, Inc. remunerates its CEO below most similar sized companies.
It’s well worth noting that while D. Mendelsohn is paid less than most company leaders (at similar sized companies), there isn’t much EPS growth. Having said that, returns to shareholders have been great. We would like to see EPS growth, but in our view it seems the CEO is remunerated reasonably. Shareholders may want to check for free if National Health Investors insiders are buying or selling shares.
Or you might rather take a peek at this analytical visualization of historic cash flow, earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.