Shankh Mitra, chief executive of the senior-housing company Welltower, made one of commercial real estate’s most daring bets in 2020.
Welltower spent more than $40 billion over the following six years to acquire tens of thousands of senior-housing units, while many rivals retreated when the pandemic caused senior-facility occupancy rates to plummet. Welltower now owns more than 2,500 senior-living communities, the most of anyone in the industry.
That move is paying off as these properties fill up again. Welltower’s market value has increased close to sevenfold to about $160 billion since 2020, making it the world’s largest publicly traded real-estate company.
Mitra has been well compensated for the turnaround. He received a compensation package valued at $821 million last year, according to The Wall Street Journal’s annual analysis of executive pay using data from MyLogIQ. That was the biggest pay package for any public-company CEO in America, save for Elon Musk.
While that payout is contingent on Welltower’s stock continuing to climb, the magnitude of Mitra’s compensation is sparking a backlash.
Institutional Shareholder Services, a proxy advisory firm, recommended that shareholders vote against the pay package, describing the awards as being of “extraordinary value.”
Jonathan Litt, founder of activist hedge fund Land & Buildings, said that the compensation plan gives management too much credit for gains driven largely by the aging of the baby boom generation and the industry’s recovery from the pandemic.
Litt, who has disclosed a short position in Welltower, said in a report that the compensation plan encourages “growth for growth’s sake” by rewarding executives for expanding the company’s market value through acquisitions.
Welltower said that the compensation plan for Mitra and other executives was needed to “secure the long-term retention of the company’s exceptional leadership.”
Five years ago, such a pay package in the senior-housing industry would have been unthinkable. The business had been weakened by years of overbuilding, then battered by the pandemic as thousands of elderly residents died. Move-ins slowed and labor costs soared.
Today, senior housing is one of commercial real estate’s hottest sectors. The oldest members of the baby boom generation are reaching the age where many need the different levels of care that Welltower and others provide: independent living, assisted living, memory care and skilled nursing.
Occupancy at U.S. senior-housing communities fell from 87.4% at the end of 2019 to a pandemic low of 78.2% in the first quarter of 2021. This year occupancy continued to rebound, climbing to 89.9% in the first quarter, according to NIC MAP, an industry data source. Occupied units stand at a record 1.05 million.
Analysts give Mitra high marks for redefining Welltower’s relationship with senior-housing operators. Welltower is a landlord and relies on operators such as Sunrise Senior Living and Atria Senior Living to run the communities, hire caregivers, market apartments and care for residents.
Mitra used Welltower’s clout to secure exclusive partnerships with some of the industry’s strongest operators while giving them better data, technology and incentives to improve performance. He also rewrote contracts so Welltower participated more directly in the gains when its operators filled more apartments and increased rents.
“They have the best operator relationships among all of their peers,” said Michael Stroyeck, an analyst with real-estate-analytics firm Green Street.
Welltower also gained an edge by concentrating on the industry’s most lucrative segment: upscale communities serving affluent seniors. Mitra sold many of the company’s low-growth healthcare properties like medical office buildings while buying senior housing in high growth areas such as Southern California, South Florida and the Toronto metro area.
One example of a high end Welltower property is Sunrise at East 56th. Located on Manhattan’s Upper East Side, it looks more like an upscale boutique hotel than a retirement home.
The 17-story community offers chef-prepared meals, a fitness studio, salon, theater and concierge services. Monthly rents begin at more than $15,330 and can exceed $20,000, depending on the apartment and level of care.
Mitra, 45 years old, had a varied career before Welltower. He was born in India and received an engineering degree there. In the U.S. he worked at Fidelity Investments and Citadel before joining Welltower’s finance division in 2016.
When Mitra took over as CEO in 2020, Welltower shares traded in the low $40s. Today, they trade above $200.
Looking at it another way, Green Street estimates that Welltower shares trade at roughly 115% to 125% above the value of its underlying real estate, compared with premiums of about 35% to 55% for many of its senior living REIT peers. That allows Welltower to raise money by selling stock on especially favorable terms to finance additional acquisitions.
These metrics help explain why Welltower’s board was willing to award him one of the richest compensation packages in corporate America. The package followed months of deliberations by Welltower’s board, which enlisted compensation consultants, law firms and spent “hundreds and hundreds of hours” designing the plan, Mitra said on an earnings call.
But Welltower investors disagreed. About 80% of shares voting opposed the company’s advisory “say-on-pay” resolution, one of the biggest rebukes of last year’s executive compensation by shareholders.
Mitra’s regular compensation for 2025 actually was pretty modest for a major U.S. company. His annual base salary was $1.3 million, and he earned a cash bonus of about $6.5 million for the company’s 2025 performance.
The real payday comes from a one-time, 10-year stock award whose value depends largely on Welltower continuing to meet ambitious performance goals. If the company does, Mitra will gradually receive shares over the next decade that were valued at $821 million when the award was granted.
Focusing on retaining Mitra and his management team, Welltower’s board also granted roughly $170 million in long-term equity awards to other top executives.
“Make no mistake, this is a team game,” Mitra said on another earnings call.
Critics fault the award in part because too much compensation depends on Mitra remaining at Welltower, rather than continuing to meet demanding performance goals. Roughly half of the package eventually vests based primarily on time, they say, while the performance hurdles are concentrated in the plan’s first five years.
“That’s disappointing,” said Alan Johnson, managing director of Johnson Associates, a compensation consulting firm. “At these magnitudes, half of it time-based just seems too much.”
Write to Peter Grant at peter.grant@wsj.com
