Should You Worry About eXp World Holdings, Inc.’s (NASDAQ:EXPI) CEO Pay Cheque?

Glenn Sanford became the CEO of eXp World Holdings, Inc. (NASDAQ:EXPI) in 2013. 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 eXp World Holdings

How Does Glenn Sanford’s Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that eXp World Holdings, Inc. has a market cap of US$574m, and reported total annual CEO compensation of US$1.4m for the year to December 2019. That’s below the compensation, last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$72k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. 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$2.3m.

Now let’s take a look at the pay mix on an industry and company level to gain a better understanding of where eXp World Holdings stands. Talking in terms of the sector, salary represented approximately 32% of total compensation out of all the companies we analysed, while other remuneration made up 68% of the pie. Non-salary compensation represents a greater slice of the remuneration pie for eXp World Holdings, in sharp contrast to the overall sector.

Most shareholders would consider it a positive that Glenn Sanford takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance. The graphic below shows how CEO compensation at eXp World Holdings has changed from year to year.

NasdaqGM:EXPI CEO Compensation May 5th 2020
NasdaqGM:EXPI CEO Compensation May 5th 2020

Is eXp World Holdings, Inc. Growing?

eXp World Holdings, Inc. has reduced its earnings per share by an average of 4.6% a year, over the last three years (measured with a line of best fit). Its revenue is up 96% over last year.

The reduction in earnings per share, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. In conclusion we can’t form a strong opinion about business performance yet; but it’s one worth watching. Shareholders might be interested in this free visualization of analyst forecasts.

Has eXp World Holdings, Inc. Been A Good Investment?

I think that the total shareholder return of 150%, over three years, would leave most eXp World Holdings, Inc. 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.

In Summary…

eXp World Holdings, Inc. is currently paying its CEO below what is normal for companies of its size.

It’s well worth noting that while Glenn Sanford is paid below what is normal at companies of similar size, the returns have been very pleasing, over the last three years. We would like to see EPS growth, but in our view it seems the CEO is modestly remunerated. Shifting gears from CEO pay for a second, we’ve picked out 2 warning signs for eXp World Holdings that investors should be aware of in a dynamic business environment.

If you want to buy a stock that is better than eXp World 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.

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