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Is Ventas, Inc.'s (NYSE:VTR) CEO Paid Enough Relative To Peers?

Simply Wall St

In 1999 Deb Cafaro was appointed CEO of Ventas, Inc. (NYSE:VTR). First, this article will compare CEO compensation with compensation at other large companies. Then we'll look at a snap shot of the business growth. 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.

View our latest analysis for Ventas

How Does Deb Cafaro's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Ventas, Inc. has a market cap of US$28b, and is paying total annual CEO compensation of US$13m. (This is based on the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.1m. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.

So Deb Cafaro 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, below, how CEO compensation at Ventas has changed over time.

NYSE:VTR CEO Compensation, August 21st 2019

Is Ventas, Inc. Growing?

Over the last three years Ventas, Inc. has shrunk its earnings per share by an average of 1.4% per year (measured with a line of best fit). It achieved revenue growth of 2.0% over the last year.

The lack of earnings per share growth in the last three years is unimpressive. The fairly low revenue growth fails to impress given that the earnings per share is down. 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 Ventas, Inc. Been A Good Investment?

Ventas, Inc. has served shareholders reasonably well, with a total return of 14% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Deb Cafaro is paid around the same as most CEOs of large companies.

We're not seeing great strides in earnings per share, and total returns were decent but not amazing in the last three years. We wouldn't say the CEO pay is too high, but one might argue that the company should improve returns to shareholders before increasing it. So you may want to check if insiders are buying Ventas shares with their own money (free access).

If you want to buy a stock that is better than Ventas, this free list of high return, low debt companies is a great place to look.

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.