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Cindy Baier has been the CEO of Brookdale Senior Living Inc. (NYSE:BKD) since 2018, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Brookdale Senior Living Inc.'s CEO Compensation With the industry
According to our data, Brookdale Senior Living Inc. has a market capitalization of US$715m, and paid its CEO total annual compensation worth US$6.4m over the year to December 2019. Notably, that's an increase of 36% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$910k.
On comparing similar companies from the same industry with market caps ranging from US$400m to US$1.6b, we found that the median CEO total compensation was US$2.7m. Hence, we can conclude that Cindy Baier is remunerated higher than the industry median. Furthermore, Cindy Baier directly owns US$1.0m worth of shares in the company.
Talking in terms of the industry, salary represented approximately 18% of total compensation out of all the companies we analyzed, while other remuneration made up 82% of the pie. Brookdale Senior Living sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Brookdale Senior Living Inc.'s Growth
Brookdale Senior Living Inc. has seen its earnings per share (EPS) increase by 92% a year over the past three years. It saw its revenue drop 4.2% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Brookdale Senior Living Inc. Been A Good Investment?
Given the total shareholder loss of 61% over three years, many shareholders in Brookdale Senior Living Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
As we noted earlier, Brookdale Senior Living pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, the EPS growth is certainly impressive, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Although we'd stop short of calling it inappropriate, we think Cindy is earning a very handsome sum.
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 identified 4 warning signs for Brookdale Senior Living (2 are significant!) that you should be aware of before investing here.
Switching gears from Brookdale Senior Living, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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.
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