Shareholders will probably not be disappointed by the robust results at The St. Joe Company (NYSE:JOE) recently and they will be keeping this in mind as they go into the AGM on 18 May 2021. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.
Comparing The St. Joe Company's CEO Compensation With the industry
According to our data, The St. Joe Company has a market capitalization of US$2.6b, and paid its CEO total annual compensation worth US$1.2m over the year to December 2020. Notably, that's an increase of 19% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$381k.
On comparing similar companies from the same industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$10m. This suggests that Jorge Gonzalez is paid below the industry median. What's more, Jorge Gonzalez holds US$889k worth of shares in the company in their own name.
On an industry level, roughly 29% of total compensation represents salary and 71% is other remuneration. St. Joe is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
The St. Joe Company's Growth
Over the past three years, The St. Joe Company has seen its earnings per share (EPS) grow by 1.2% per year. Its revenue is up 41% over the last year.
It's great to see that revenue growth is strong. Combined with modest EPS growth, we get a good impression of the company. We'd stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. 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 The St. Joe Company Been A Good Investment?
We think that the total shareholder return of 135%, over three years, would leave most The St. Joe Company shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
While the company seems to be headed in the right direction performance-wise, there's always room for improvement. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. Rather, investors would more likely want to engage on discussions related to key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for St. Joe (1 is potentially serious!) that you should be aware of before investing here.
Important note: St. Joe is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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