Tom DeRosa became the CEO of Welltower Inc. (NYSE:WELL) in 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Tom DeRosa’s Compensation Compare With Similar Sized Companies?
According to our data, Welltower Inc. has a market capitalization of US$34b, and paid its CEO total annual compensation worth US$13m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, 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$11m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
So Tom DeRosa 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, below, how CEO compensation at Welltower has changed over time.
Is Welltower Inc. Growing?
On average over the last three years, Welltower Inc. has shrunk earnings per share by 16% each year (measured with a line of best fit). In the last year, its revenue is up 12%.
Unfortunately, earnings per share have trended lower over the last three years. There’s no doubt that the silver lining is that revenue is up. But it isn’t sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has Welltower Inc. Been A Good Investment?
Most shareholders would probably be pleased with Welltower Inc. for providing a total return of 49% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Remuneration for Tom DeRosa is close enough to the median pay for a CEO of a large company .
We’re not seeing great strides in earnings per share, but the company has clearly pleased some investors, given the returns over the last three years. So we doubt many are complaining about the fairly normal CEO pay. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Welltower (free visualization of insider trades).
Important note: Welltower may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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