Here's What We Think About Sabra Health Care REIT, Inc.'s (NASDAQ:SBRA) CEO Pay

In 2010 Rick Matros was appointed CEO of Sabra Health Care REIT, Inc. (NASDAQ:SBRA). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.

View 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$2.6b, 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. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$5.6m.

Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Speaking on an industry level, we can see that nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. Sabra Health Care REIT is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation

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, below, how CEO compensation at Sabra Health Care REIT has changed over time.

Is Sabra Health Care REIT, Inc. Growing?

Over the last three years Sabra Health Care REIT, Inc. has shrunk its earnings per share by an average of 28% per year (measured with a line of best fit). Its revenue is down 4.6% over last year.

Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last 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?

Given the total loss of 42% over three years, many shareholders in Sabra Health Care REIT, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Remuneration for Rick Matros is close enough to the median pay for a CEO of a similar sized company .

The company isn't growing EPS, and shareholder returns have been disappointing. Few would argue that it's wise for the company to pay any more, before returns improve. On another note, Sabra Health Care REIT has 6 warning signs (and 1 which is concerning) we think you should know about.

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.

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