John Baker became the CEO of FRP Holdings, Inc. (NASDAQ:FRPH) in 2017. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does John Baker's Compensation Compare With Similar Sized Companies?
Our data indicates that FRP Holdings, Inc. is worth US$478m, and total annual CEO compensation is US$610k. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$223k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.8m.
Most shareholders would consider it a positive that John Baker takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see, below, how CEO compensation at FRP Holdings has changed over time.
Is FRP Holdings, Inc. Growing?
FRP Holdings, Inc. has increased its earnings per share (EPS) by an average of 3.6% a year, over the last three years (using a line of best fit). Its revenue is up 9.8% over last year.
I would argue that the improvement in revenue isn't particularly impressive, but I'm happy with the modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has FRP Holdings, Inc. Been A Good Investment?
Most shareholders would probably be pleased with FRP Holdings, Inc. for providing a total return of 49% 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.
It looks like FRP Holdings, Inc. pays its CEO less than similar sized companies.
John Baker receives relatively low remuneration compared to similar sized companies. And the returns to shareholders were great, over the last few years. So, while it might be nice to have better EPS growth, on our analysis the CEO compensation is quite modest. So you may want to check if insiders are buying FRP Holdings shares with their own money (free access).
Important note: FRP Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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