Ryan Marshall became the CEO of PulteGroup, Inc. (NYSE:PHM) in 2016. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Ryan Marshall's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that PulteGroup, Inc. has a market cap of US$8.2b, and is paying total annual CEO compensation of US$9.8m. (This is based on the year to December 2018). Notably, that's an increase of 70% over the year before. We think total compensation is more important but we note that the CEO salary is lower, at US$942k. We looked at a group of companies with market capitalizations from US$4.0b to US$12b, and the median CEO total compensation was US$6.4m.
Thus we can conclude that Ryan Marshall receives more in total compensation than the median of a group of companies in the same market, and of similar size to PulteGroup, Inc.. However, this doesn't necessarily mean the pay 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 a visual representation of the CEO compensation at PulteGroup, below.
Is PulteGroup, Inc. Growing?
PulteGroup, Inc. has increased its earnings per share (EPS) by an average of 28% a year, over the last three years (using a line of best fit). Its revenue is up 19% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has PulteGroup, Inc. Been A Good Investment?
Most shareholders would probably be pleased with PulteGroup, Inc. for providing a total return of 65% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared the total CEO remuneration paid by PulteGroup, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Whatever your view on compensation, you might want to check if insiders are buying or selling PulteGroup 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.
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