Is M/I Homes, Inc. (NYSE:MHO) Excessively Paying Its CEO?

Bob Schottenstein became the CEO of M/I Homes, Inc. (NYSE:MHO) in 2004. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.

See our latest analysis for M/I Homes

How Does Bob Schottenstein’s Compensation Compare With Similar Sized Companies?

Our data indicates that M/I Homes, Inc. is worth US$973m, and total annual CEO compensation is US$5.3m. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$900k. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO total compensation was US$2.7m.

Thus we can conclude that Bob Schottenstein receives more in total compensation than the median of a group of companies in the same market, and of similar size to M/I Homes, Inc.. 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 M/I Homes, below.

NYSE:MHO CEO Compensation, August 12th 2019
NYSE:MHO CEO Compensation, August 12th 2019

Is M/I Homes, Inc. Growing?

M/I Homes, Inc. has increased its earnings per share (EPS) by an average of 25% a year, over the last three years (using a line of best fit). Its revenue is up 14% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing.

Has M/I Homes, Inc. Been A Good Investment?

Boasting a total shareholder return of 57% over three years, M/I Homes, Inc. has done well by shareholders. 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.

In Summary…

We compared total CEO remuneration at M/I Homes, Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at M/I Homes.

Important note: M/I Homes may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.