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Is Omega Healthcare Investors, Inc.'s (NYSE:OHI) CEO Pay Fair?

Simply Wall St

C. Pickett has been the CEO of Omega Healthcare Investors, Inc. (NYSE:OHI) since 2001. 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Omega Healthcare Investors

How Does C. Pickett's Compensation Compare With Similar Sized Companies?

According to our data, Omega Healthcare Investors, Inc. has a market capitalization of US$9.6b, and paid its CEO total annual compensation worth US$6.6m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$780k. 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$4.0b to US$12b. The median total CEO compensation was US$6.7m.

So C. Pickett receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

The graphic below shows how CEO compensation at Omega Healthcare Investors has changed from year to year.

NYSE:OHI CEO Compensation, November 8th 2019

Is Omega Healthcare Investors, Inc. Growing?

Omega Healthcare Investors, Inc. has reduced its earnings per share by an average of 11% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 2.1% over the 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. 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 Omega Healthcare Investors, Inc. Been A Good Investment?

Boasting a total shareholder return of 85% over three years, Omega Healthcare Investors, Inc. 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...

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

The company isn't growing earnings per share, but shareholder returns have been strong over the last three years. So we doubt many are complaining about the fairly normal CEO pay. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Omega Healthcare Investors.

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.

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 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. Thank you for reading.