How Does Beazer Homes USA's (NYSE:BZH) CEO Salary Compare to Peers?

Allan Merrill became the CEO of Beazer Homes USA, Inc. (NYSE:BZH) in 2011, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Beazer Homes USA.

View our latest analysis for Beazer Homes USA

How Does Total Compensation For Allan Merrill Compare With Other Companies In The Industry?

At the time of writing, our data shows that Beazer Homes USA, Inc. has a market capitalization of US$558m, and reported total annual CEO compensation of US$7.1m for the year to September 2020. Notably, that's an increase of 37% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$880k.

On examining similar-sized companies in the industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$1.7m. Accordingly, our analysis reveals that Beazer Homes USA, Inc. pays Allan Merrill north of the industry median. Furthermore, Allan Merrill directly owns US$15m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 29% of total compensation represents salary, while the remainder of 71% is other remuneration. In Beazer Homes USA's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Beazer Homes USA, Inc.'s Growth

Beazer Homes USA, Inc.'s earnings per share (EPS) grew 68% per year over the last three years. Its revenue is up 1.6% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Beazer Homes USA, Inc. Been A Good Investment?

With a total shareholder return of 7.5% over three years, Beazer Homes USA, Inc. has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

As previously discussed, Allan is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, we must not forget that the EPS growth has been very strong over three years. We also think investor returns are steady over the same time period. While it may be worth researching further, we don't see a problem with the high CEO pay, given the good EPS growth.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for Beazer Homes USA that investors should think about before committing capital to this stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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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