In 2003 Ed Aldag was appointed CEO of Medical Properties Trust, Inc. (NYSE:MPW). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
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How Does Ed Aldag’s Compensation Compare With Similar Sized Companies?
According to our data, Medical Properties Trust, Inc. has a market capitalization of US$7.4b, and pays its CEO total annual compensation worth US$13m. (This number is for the twelve months until December 2018). That’s a notable increase of 74% on last year. We think total compensation is more important but we note that the CEO salary is lower, at US$1.0m. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$7.0m.
It would therefore appear that Medical Properties Trust, Inc. pays Ed Aldag more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Medical Properties Trust has changed over time.
Is Medical Properties Trust, Inc. Growing?
On average over the last three years, Medical Properties Trust, Inc. has grown earnings per share (EPS) by 50% each year (using a line of best fit). Revenue was pretty flat on last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. You might want to check this free visual report on analyst forecasts for future earnings.
Has Medical Properties Trust, Inc. Been A Good Investment?
Boasting a total shareholder return of 57% over three years, Medical Properties Trust, 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.
We examined the amount Medical Properties Trust, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. So, considering this good performance, the CEO compensation may be quite appropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Medical Properties Trust.
Important note: Medical Properties Trust may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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.