Allan Merrill became the CEO of Beazer Homes USA, Inc. (NYSE:BZH) in 2011. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
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How Does Allan Merrill’s Compensation Compare With Similar Sized Companies?
According to our data, Beazer Homes USA, Inc. has a market capitalization of US$346m, and pays its CEO total annual compensation worth US$6.2m. (This figure is for the year to 2018). That’s a fairly small increase of 6.6% on year before. While we always look at total compensation first, we note that the salary component is less, at US$949k. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO compensation of that group was US$1.6m.
It would therefore appear that Beazer Homes USA, Inc. pays Allan Merrill more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Beazer Homes USA has changed over time.
Is Beazer Homes USA, Inc. Growing?
Over the last three years Beazer Homes USA, Inc. has shrunk its earnings per share by an average of 125% per year. Its revenue is up 10.0% over last year.
Unfortunately, earnings per share have trended lower over the last three years. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Beazer Homes USA, Inc. Been A Good Investment?
With a total shareholder return of 28% over three years, Beazer Homes USA, Inc. shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
We examined the amount Beazer Homes USA, 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.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
And while shareholder returns have been respectable, they have hardly been superb. So we think more research is needed, but we don’t think the CEO underpaid. So you may want to check if insiders are buying Beazer Homes USA shares with their own money (free access).
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.