Yahoo Finance The Compensation For Meritage Homes Corporation's (NYSE:MTH) CEO Looks Deserved And Here's Why
Key Insights
Meritage Homes to hold its Annual General Meeting on 16th of May
Total pay for CEO Phillippe Lord includes US$900.0k salary
The total compensation is similar to the average for the industry
Meritage Homes' EPS grew by 19% over the past three years while total shareholder return over the past three years was 65%
It would be hard to discount the role that CEO Phillippe Lord has played in delivering the impressive results at Meritage Homes Corporation (NYSE:MTH) recently. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 16th of May. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.
View our latest analysis for Meritage Homes
Comparing Meritage Homes Corporation's CEO Compensation With The Industry
Our data indicates that Meritage Homes Corporation has a market capitalization of US$6.6b, and total annual CEO compensation was reported as US$11m for the year to December 2023. Notably, that's an increase of 35% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$900k.
On examining similar-sized companies in the American Consumer Durables industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$11m. This suggests that Meritage Homes remunerates its CEO largely in line with the industry average. Moreover, Phillippe Lord also holds US$18m worth of Meritage Homes stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$900k | US$900k | 8% |
Other | US$9.9m | US$7.1m | 92% |
Total Compensation | US$11m | US$8.0m | 100% |
On an industry level, around 17% of total compensation represents salary and 83% is other remuneration. It's interesting to note that Meritage Homes allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Meritage Homes Corporation's Growth Numbers
Meritage Homes Corporation has seen its earnings per share (EPS) increase by 19% a year over the past three years. In the last year, its revenue changed by just 0.7%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Meritage Homes Corporation Been A Good Investment?
Most shareholders would probably be pleased with Meritage Homes Corporation for providing a total return of 65% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
To Conclude...
Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for Meritage Homes you should be aware of, and 1 of them is potentially serious.
Switching gears from Meritage Homes, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
