Todd Meredith became the CEO of Healthcare Realty Trust Incorporated (NYSE:HR) in 2016. First, this article will compare CEO compensation with compensation at similar sized 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 Todd Meredith’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Healthcare Realty Trust Incorporated has a market cap of US$4.5b, and reported total annual CEO compensation of US$3.1m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$525k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. 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$5.1m.
Most shareholders would consider it a positive that Todd Meredith takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see a visual representation of the CEO compensation at Healthcare Realty Trust, below.
Is Healthcare Realty Trust Incorporated Growing?
On average over the last three years, Healthcare Realty Trust Incorporated has shrunk earnings per share by 45% each year (measured with a line of best fit). In the last year, its revenue is up 3.8%.
Sadly for shareholders, earnings per share are actually down, over three years. The modest increase in revenue in the last year isn’t enough to make me overlook the disappointing change in earnings per share. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Healthcare Realty Trust Incorporated Been A Good Investment?
With a total shareholder return of 24% over three years, Healthcare Realty Trust Incorporated shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
It appears that Healthcare Realty Trust Incorporated remunerates its CEO below most similar sized companies.
Todd Meredith is remunerated more modestly than is a normal at similar sized companies. However, the earnings per share are not moving in the right direction, and the returns to shareholders could have been better. We would like to see EPS growth from the business, although we wouldn’t say the CEO pay is high. So you may want to check if insiders are buying Healthcare Realty Trust shares with their own money (free access).
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 email@example.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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