Community Healthcare Trust Incorporated's (NYSE:CHCT) CEO Compensation Is Looking A Bit Stretched At The Moment

Performance at Community Healthcare Trust Incorporated (NYSE:CHCT) has been reasonably good and CEO Tim Wallace has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 06 May 2021. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Community Healthcare Trust

How Does Total Compensation For Tim Wallace Compare With Other Companies In The Industry?

Our data indicates that Community Healthcare Trust Incorporated has a market capitalization of US$1.2b, and total annual CEO compensation was reported as US$3.7m for the year to December 2020. Notably, that's an increase of 44% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$645k.

On examining similar-sized companies in the industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$2.1m. This suggests that Tim Wallace is paid more than the median for the industry. What's more, Tim Wallace holds US$43m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	US$645k	US$540k	17%
Other	US$3.1m	US$2.1m	83%
Total Compensation	US$3.7m	US$2.6m	100%

On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. Community Healthcare Trust is paying a higher share of its remuneration through a salary in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Community Healthcare Trust Incorporated's Growth Numbers

Community Healthcare Trust Incorporated's funds from operations (FFO) grew 28% per yearover the last three years. In the last year, its revenue is up 24%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Community Healthcare Trust Incorporated Been A Good Investment?

Boasting a total shareholder return of 123% over three years, Community Healthcare Trust Incorporated has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 3 warning signs for Community Healthcare Trust that investors should be aware of in a dynamic business environment.

Important note: Community Healthcare Trust is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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