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Is Sabra Health Care REIT, Inc.'s (NASDAQ:SBRA) CEO Salary Justified?

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Simply Wall St
·3 min read
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Rick Matros has been the CEO of Sabra Health Care REIT, Inc. (NASDAQ:SBRA) since 2010. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Sabra Health Care REIT

How Does Rick Matros's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Sabra Health Care REIT, Inc. has a market cap of US$4.3b, and reported total annual CEO compensation of US$4.7m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$850k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$4.9m.

So Rick Matros is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see a visual representation of the CEO compensation at Sabra Health Care REIT, below.

NasdaqGS:SBRA CEO Compensation, February 6th 2020
NasdaqGS:SBRA CEO Compensation, February 6th 2020

Is Sabra Health Care REIT, Inc. Growing?

Sabra Health Care REIT, Inc. has reduced its earnings per share by an average of 15% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down 9.9%.

Sadly for shareholders, earnings per share are actually down, over three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has Sabra Health Care REIT, Inc. Been A Good Investment?

Sabra Health Care REIT, Inc. has generated a total shareholder return of 8.3% over three years, so most shareholders wouldn't be too disappointed. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Rick Matros is paid around the same as most CEOs of similar size companies.

We feel that earnings per share have been a bit disappointing, but and we don't think the total returns are amazing. We do not think the CEO pay is a problem, but we'd venture the company should look to improve its business metrics (and share price) before paying any more. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Sabra Health Care REIT (free visualization of insider trades).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.

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. Thank you for reading.