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Should You Worry About FRP Holdings, Inc.'s (NASDAQ:FRPH) CEO Pay?

Simply Wall St

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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for FRP Holdings

How Does John Baker's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that FRP Holdings, Inc. has a market cap of US$438m, and reported total annual CEO compensation of US$610k for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$223k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO total compensation was US$1.9m.

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 a visual representation of the CEO compensation at FRP Holdings, below.

NasdaqGS:FRPH CEO Compensation, March 9th 2020

Is FRP Holdings, Inc. Growing?

FRP Holdings, Inc. has reduced its earnings per share by an average of 15% a year, over the last three years (measured with a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the flat revenue is seriously uninspiring. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has FRP Holdings, Inc. Been A Good Investment?

With a total shareholder return of 19% over three years, FRP Holdings, Inc. 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.

In Summary...

It appears that FRP Holdings, Inc. remunerates its CEO below most similar sized companies.

The compensation paid to John Baker is lower than is usual at similar sized companies. However, the earnings per share are not moving in the right direction, and the returns to shareholders could have been better. So while shareholders shouldn't be overly concerned about CEO compensation, we suspect most would prefer see improved performance, before increasing pay. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at FRP Holdings.

If you want to buy a stock that is better than FRP Holdings, this free list of high return, low debt companies is a great place to look.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.