Bob Schottenstein became the CEO of M/I Homes, Inc. (NYSE:MHO) in 2004. 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 Bob Schottenstein's Compensation Compare With Similar Sized Companies?
According to our data, M/I Homes, Inc. has a market capitalization of US$1.2b, and paid its CEO total annual compensation worth US$5.3m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$900k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.0m.
It would therefore appear that M/I Homes, Inc. pays Bob Schottenstein 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. 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 M/I Homes has changed over time.
Is M/I Homes, Inc. Growing?
Over the last three years M/I Homes, Inc. has grown its earnings per share (EPS) by an average of 26% per year (using a line of best fit). It achieved revenue growth of 14% over the last year.
This demonstrates that the company has been improving recently. A good result. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has M/I Homes, Inc. Been A Good Investment?
Most shareholders would probably be pleased with M/I Homes, Inc. for providing a total return of 94% 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 total CEO remuneration at M/I Homes, Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark 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. So you may want to check if insiders are buying M/I Homes shares with their own money (free access).
If you want to buy a stock that is better than M/I Homes, this free list of high return, low debt companies is a great place to look.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.