By Steve Moran
Author’s note: After this article was written, on Friday, October 7, Brookdale’s stock price jumped to as high as $5.11 per share — from a closing price the day before of right around $4.00 — on rumors of a possible sale. The market enthusiasm for a change in direction only confirms what I wrote here.
It’s a sad, sad tale. Brookdale’s closing stock price on October 5, 2022 — the day I am writing this — dropped to $3.88 a share. And if that is not enough gloom (source: Yahoo Finance) …
- Brookdale’s stock is down 24% for the year.
- Over the last five years, their stock price is down 60%.
- The price is down 34% in the last year. By way of comparison, the broader market lost about 17% in the same period.
- When you look at their trailing 12-month revenue, it is down 9% for each of the last five years.
Stop Picking on Brookdale
I hate writing these articles, because I know they piss people off, but this stuff is important to talk about. Brookdale is the single largest provider of senior living in the country. In a very real way, what happens at Brookdale impacts the entire senior living marketplace.
They hire more people — who form their opinion about working in senior living based on that experience — than any other company.
They provide senior living to older people that is the basis for their view of senior living, and for the views of their family members and friends.
FRIEND, Not Foe
As a writer, I face a certain amount of criticism from readers. It is sometimes painful but always helpful. The simple fact is that I learn more from my critics than my fans … most of the time. When I get those calls, those emails, and those comments, I most of the time assume they come with good intentions.
They want me to be better, then want Senior Living Foresight to be better. They want senior living to be better, and their suggestions always, 100% of the time, deserve serious consideration … even those that tell me where to stick my head.
I write this believing that it does not have to be this way at Brookdale. That in a few months, certainly in under a year, they could have an occupancy that beats the industry average and be well on the way to being one of the best employers in the industry.
The fix starts with acknowledging the problem — not just the numbers, but more importantly, that what they are doing right now IS NOT WORKING. It is baffling when an organization like Brookdale continues on the same path, even though it is not getting the results they desire.
It requires some humility. It requires bringing some new consultants with new ideas. It requires great courage. One of the huge problems with C-suite compensation is that the base compensation, regardless of performance, is huge by most people’s standards. I wonder if it would be this way if the C-Suite compensation had a base of, say, $100,000, and the rest was tied to performance. I am thinking the motivation to do something radically different would go way up.
There are people who can help. I can help. Don’t like me? How About Steve Monroe, who recently swiped my offer to take a seat on the board? Actually, he is welcome to it. Brookdale needs to bring me in as a consultant, and together, we could accomplish senior living’s greatest turnaround in history. And yep, I would take all my compensation, 100% on the upside.
It’s so easy. I will even be in Nashville next week. Most of Thursday is open. I am begging for a chance, and you don’t have to pay me unless it works. … And it is hard to imagine that it could get much worse.