Should You Worry About Taylor Morrison Home Corporation's (NYSE:TMHC) CEO Salary Level?
In 2012 Sheryl Palmer was appointed CEO of Taylor Morrison Home Corporation (NYSE:TMHC). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Taylor Morrison Home
How Does Sheryl Palmer's Compensation Compare With Similar Sized Companies?
Our data indicates that Taylor Morrison Home Corporation is worth US$2.1b, and total annual CEO compensation is US$6.2m. (This figure is for the year to December 2017). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0m. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$3.6m.
Thus we can conclude that Sheryl Palmer receives more in total compensation than the median of a group of companies in the same market, and of similar size to Taylor Morrison Home Corporation. 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 Taylor Morrison Home, below.
Is Taylor Morrison Home Corporation Growing?
On average over the last three years, Taylor Morrison Home Corporation has grown earnings per share (EPS) by 10.0% each year (using a line of best fit). Its revenue is up 8.8% over last year.
I'm not particularly impressed by the revenue growth, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. It could be important to check this free visual depiction of what analysts expect for the future.
Has Taylor Morrison Home Corporation Been A Good Investment?
Taylor Morrison Home Corporation has generated a total shareholder return of 26% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
We examined the amount Taylor Morrison Home Corporation pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Over the last three years returns to investors have been uninspiring, and we would have liked to see stronger business growth. So it's certainly hard to argue that the CEO is modestly paid, although we don't see the remuneration as an issue. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Taylor Morrison Home.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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. Thank you for reading.
