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Deb Cafaro became the CEO of Ventas, Inc. (NYSE:VTR) in 1999. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
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$11b, and reported total annual CEO compensation of US$13m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$1.1m. 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 over US$8.0b and the median CEO total compensation was US$12m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Ventas stands. On a sector level, around 16% of total compensation represents salary and 84% is other remuneration. Ventas sets aside a smaller share of compensation for salary, in comparison to the overall industry.
So Deb Cafaro receives a similar amount to the median CEO pay, amongst 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 Ventas, below.
Is Ventas, Inc. Growing?
Ventas, Inc. has reduced its earnings per share by an average of 23% a year, over the last three years (measured with a line of best fit). Its revenue is up 4.3% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. 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. It could be important to check this free visual depiction of what analysts expect for the future.
Has Ventas, Inc. Been A Good Investment?
With a three year total loss of 49%, Ventas, Inc. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
Deb Cafaro is paid around what is normal for the leaders of larger companies.
The company isn't growing EPS, and shareholder returns have been disappointing. Suffice it to say, we don't think the CEO is underpaid! Shifting gears from CEO pay for a second, we've spotted 3 warning signs for Ventas you should be aware of, and 1 of them is a bit unpleasant.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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