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Jorge Gonzalez became the CEO of The St. Joe Company (NYSE:JOE) in 2015, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for St. Joe.
How Does Total Compensation For Jorge Gonzalez Compare With Other Companies In The Industry?
Our data indicates that The St. Joe Company has a market capitalization of US$1.2b, and total annual CEO compensation was reported as US$1.0m for the year to December 2019. We note that's an increase of 15% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$400k.
On comparing similar companies from the same industry with market caps ranging from US$400m to US$1.6b, we found that the median CEO total compensation was US$4.1m. In other words, St. Joe pays its CEO lower than the industry median. Moreover, Jorge Gonzalez also holds US$426k worth of St. Joe stock directly under their own name.
Talking in terms of the industry, salary represented approximately 32% of total compensation out of all the companies we analyzed, while other remuneration made up 68% of the pie. St. Joe pays out 38% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
The St. Joe Company's Growth
The St. Joe Company's earnings per share (EPS) grew 36% per year over the last three years. In the last year, its revenue is up 22%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has The St. Joe Company Been A Good Investment?
With a total shareholder return of 12% over three years, The St. Joe Company shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
As we noted earlier, St. Joe pays its CEO lower than the norm for similar-sized companies belonging to the same industry. At the same time, earnings growth has been exceptional over the past three years. Unfortunately, although shareholder returns are growing, they haven't impressed us as much in comparison, over the same period. We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. So considering these factors, we think Jorge is modestly compensated.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for St. Joe (1 can't be ignored!) that you should be aware of before investing here.
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.
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. 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.
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