Eric Mendelsohn will be the next president and CEO of National Health Investors Inc. (NYSE: NHI), the Murfreesboro, Tennessee-based real estate investment trust announced Monday.
Mendelsohn has served as interim president and CEO since his predecessor, Justin Hutchens, departed the company in August in a high-profile move to HCP Inc. (NYSE: HCP).
After nine years with Emeritus Senior Living, including as senior vice president of corporate development, Mendelsohn joined NHI in January 2015.
“I am pleased to announce that after a deliberate and careful search process, the board has unanimously chosen Mr. Mendelsohn as NHI’s next CEO,” Chairman of the Board Andy Adams said in a prepared statement. “Mr. Mendelsohn has been a proven asset since joining NHI and has performed well as our interim CEO since August. With this appointment, the board looks forward to NHI’s continued growth and expansion under his leadership.”
Mendelsohn’s initial term is through Dec. 31, 2016, at an initial base salary of $300,000, according to a filing with the Securities and Exchange Commission. He also is entitled to a funds from operations (FFO) bonus of $150,000 based on at least a 5% increase over 2015, and a dividend bonus of $150,000 based on at least a 5% increase in the company’s recurring dividends over 2015.
Other provisions include a 24-month non-compete and non-solicitation period, and a $25,000 a month payment for up to 24 months, if he is terminated without cause or through a constructive discharge, according to the filing.
The departure of Hutchens, a highly regarded leader, was seen by some as a blow to NHI; in one measure of his value to the company, BMO analyst John Kim downgraded NHI to market perform and cut the price target by 13% on the news that Hutchens would be going to HCP.
And with NHI destabilized, another analyst—Mizuho’s Richard Anderson—floated the idea that the company might be viewed as an attractive acquisition target by another REIT competing for similar senior housing assets.
“We will take it forward from here,” Mendelsohn told SHN in response to Anderson’s conjecture, noting that Hutchens had left the company in sound condition. Mendelsohn’s focus would be on creating shareholder value through accretive acquisitions and maintaining a low-leverage balance sheet, he said.
It was a message he sounded again on Monday.
“I’m extremely honored for the opportunity to be part of the exceptional, dedicated and talented team at NHI and believe together we will continue to focus on growing our portfolio with high quality investments,” he said in the press release announcing his appointment.
NHI’s portfolio consists of 187 properties in 31 states, and approximately 60% of its assets are classified as senior housing. The company’s market capitalization as of Oct. 5 was about $2.17 billion, according to Google Finance.
Written by Tim Mullaney