Carriage Services, Inc. (CSV)

I’m pleasantly surprised management instituted a new 5 year incentive comp program that only rewards executives if CSV’s stock grows at a CAGR of 25%, 30%, or 35% between Dec 31 2018 – 2023. I take this as a very bullish sign that they are confident they can get the stock significantly higher from here...They get nothing unless CSV is $47.30 on 12/31/2023. From the earnings release last night:

"Carriage’s Board and I believe it is important to have the 2019 long term incentive program for the current leaders of the company aligned with long term shareholder value creation. Accordingly we have created a one-time, “Believe It or Not” (BION) Shareholder Value Creation Incentive Program for certain operating and support leaders and myself. Performance shares awarded from BION will only vest after five years if Carriage’s share price compounds at a 25% rate of return or higher from our closing price of $15.50 on December 31, 2018, which equates to a CSV minimum share price of $47.30 on December 31, 2023 and a five year total increase of at least 205%.

The program will also award additional performance shares at compound rates of share price increases of 30% or higher (minimum $57.55) and 35% or higher (minimum $69.50), five year total increases of 271% and 348%, respectively. The BION program is purposefully designed to provide one-time rewards for the participants only if there is significant long term shareholder value created, and because there is no performance award below a 25% compounded return, the current cost to EPS over the five year time-frame is only about 2.5¢/share annually. Moreover, because awards are paid in appreciated shares, the maximum potential dilution to shareholders is about 2% at the 25% compound share price growth category, 3% at the 30% compound category and 4% at the 35% compound category. Carriage’s long term shareholders will be the big winners of this program"