Stock Analysis

It Looks Like Shareholders Would Probably Approve CareTrust REIT, Inc.'s (NASDAQ:CTRE) CEO Compensation Package

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We have been pretty impressed with the performance at CareTrust REIT, Inc. (NASDAQ:CTRE) recently and CEO Greg Stapley deserves a mention for their role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 30 April 2021. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

See our latest analysis for CareTrust REIT

How Does Total Compensation For Greg Stapley Compare With Other Companies In The Industry?

At the time of writing, our data shows that CareTrust REIT, Inc. has a market capitalization of US$2.3b, and reported total annual CEO compensation of US$3.7m for the year to December 2020. That's a notable increase of 16% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$675k.

On comparing similar companies from the same industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$4.0m. From this we gather that Greg Stapley is paid around the median for CEOs in the industry. Furthermore, Greg Stapley directly owns US$24m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary US$675k US$595k 18%
Other US$3.0m US$2.6m 82%
Total CompensationUS$3.7m US$3.2m100%

On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. It's interesting to note that CareTrust REIT pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

NasdaqGS:CTRE CEO Compensation April 24th 2021

CareTrust REIT, Inc.'s Growth

CareTrust REIT, Inc.'s funds from operations (FFO) grew 29% per yearover the last three years. In the last year, its revenue is up 9.1%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has CareTrust REIT, Inc. Been A Good Investment?

Boasting a total shareholder return of 112% over three years, CareTrust REIT, Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for CareTrust REIT that you should be aware of before investing.

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.

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