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Is Century Communities, Inc. (NYSE:CCS) Excessively Paying Its CEO?

Simply Wall St

Dale Francescon became the CEO of Century Communities, Inc. (NYSE:CCS) in 2002. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Century Communities

How Does Dale Francescon's Compensation Compare With Similar Sized Companies?

Our data indicates that Century Communities, Inc. is worth US$930m, and total annual CEO compensation was reported as US$7.5m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$850k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO total compensation was US$2.7m.

As you can see, Dale Francescon is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Century Communities, Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at Century Communities has changed over time.

NYSE:CCS CEO Compensation, October 7th 2019

Is Century Communities, Inc. Growing?

Over the last three years Century Communities, Inc. has grown its earnings per share (EPS) by an average of 11% per year (using a line of best fit). In the last year, its revenue is up 29%.

This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. You might want to check this free visual report on analyst forecasts for future earnings.

Has Century Communities, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Century Communities, Inc. for providing a total return of 48% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We examined the amount Century Communities, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Century Communities shares (free trial).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.