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In 2016 Todd Meredith was appointed CEO of Healthcare Realty Trust Incorporated (NYSE:HR). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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 process should give us an idea about how appropriately the CEO is paid.
How Does Todd Meredith’s Compensation Compare With Similar Sized Companies?
Our data indicates that Healthcare Realty Trust Incorporated is worth US$4.2b, and total annual CEO compensation is US$3.1m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$525k. 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$5.2m.
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, below, how CEO compensation at Healthcare Realty Trust has changed over time.
Is Healthcare Realty Trust Incorporated Growing?
On average over the last three years, Healthcare Realty Trust Incorporated has shrunk earnings per share by 30% each year (measured with a line of best fit). Its revenue is up 4.3% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
Has Healthcare Realty Trust Incorporated Been A Good Investment?
Healthcare Realty Trust Incorporated has not done too badly by shareholders, with a total return of 4.9%, over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
It looks like Healthcare Realty Trust Incorporated pays its CEO less than 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. There is room for improved company performance, but we don’t see the CEO pay as a big issue here. Whatever your view on compensation, you might want to check if insiders are buying or selling Healthcare Realty Trust shares (free trial).
If you want to buy a stock that is better than Healthcare Realty Trust, this free list of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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. Thank you for reading.