Aging Well: News & Insights for Seniors and Caregivers
- Wall Street Journal ranked Shankh Mitra's long-term pay at $821 million, second only to Elon Musk.
- Tim McHugh's long-term package totaled $167 million, outpacing many CFOs and several CEOs.
- 10-Year Executive Continuity and Alignment Program (ECAP) replaced most cash and equity pay; executives receive $110,000 base salary through 2035.
- Half the award ties to total shareholder return versus FTSE NAREIT Healthcare, MSCI U.S. REIT, and S&P 500, plus market-cap growth goals.
- Land & Buildings disclosed a short position, called the plan staggering; Welltower launched a $10 million annual Charlie Munger employee grant.
Leaders at Welltower (NYSE: WELL) have some of the highest compensation plans in the country compared to other executives, a fact that is again in the spotlight after two new Wall Street Journal articles.
A June 22 Wall Street Journal analysis of MyLogIQ data listing top-paid CEOs ranked Welltower’s Shankh Mitra in the no. 2 spot, with a long-term executive compensation plan valued at $821 million. That total was second only to Elon Musk’s $158 billion Tesla pay package, the analysis found.
A separate Wall Street Journal article also noted the record-setting long-term pay package of Welltower CFO and co-President Tim McHugh, which outpaced other CFOs and multiple CEOs when it totaled $167 million.
Welltower’s stock plan, released last October, included a 10-Year Executive Continuity and Alignment Program (ECAP) that replaced substantially all cash and equity compensation for executives. Under the plan, the company’s executives are set to receive an $110,000 of annual base salary through 2035 in exchange for a long-term, equity-based incentive award.
The first half of the award is subject to Welltower’s total shareholder return compared to that of the FTSE NAREIT Healthcare, the MSCI U.S. REIT and the S&P 500 indexes. That is in addition to the program’s market capitalization growth objectives.
Mitra’s base salary in 2025 – before the new compensation plan was approved – was $1.3 million with a cash bonus of about $6.5 million based on the Toledo, Ohio-based real estate investment trust (REIT’s) financial results that year.
Welltower management has defended the stock plan as part of its renewed focus on the quality of the communities the company owns and the lives of the people who reside and work in them. The plan links the company’s executive compensation with the creation of shareholder value and reflects an “all-in” commitment to growth and improvement on the part of its leaders, they have repeatedly noted in the past.
The Wall Street Journal article notes that Welltower shares trade at about 115% to 125% above the value of its underlying real estate, according to an estimate from Green Street. When taken with the fact that the senior living REIT’s peers carry share price premiums of about 35% to 55%, “these metrics help explain why Welltower’s board was willing to award [Mitra] one of the richest compensation packages in corporate America,” the Wall Street Journal article reads.
In conjunction with its exec compensation plan, Welltower also last year launched a new annual grant in the name of late businessperson Charlie Munger to award frontline employees at the top-10 performing communities in the company’s portfolio with shares from a pool worth $10 million.
This isn’t the first time Welltower’s executive pay plans have drawn attention. In April, activist investor Land & Buildings and its founder, Jonathan Litt, targeted the REIT and revealed a short position on its stock over what he called a “staggering and historically unprecedented” payment plan, which includes a built-in termination fee for ousted executives.
Read the full article on the original source
