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

Bob Schottenstein has been the CEO of M/I Homes, Inc. (NYSE:MHO) since 2004, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether M/I Homes pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for M/I Homes

Comparing M/I Homes, Inc.'s CEO Compensation With the industry

According to our data, M/I Homes, Inc. has a market capitalization of US$982m, and paid its CEO total annual compensation worth US$5.3m over the year to December 2019. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$900k.

For comparison, other companies in the same industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$5.3m. So it looks like M/I Homes compensates Bob Schottenstein in line with the median for the industry. Moreover, Bob Schottenstein also holds US$19m worth of M/I Homes stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On a industry level, around 26% of total compensation represents salary and 74% is other remuneration. It's interesting to note that M/I Homes allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at M/I Homes, Inc.'s Growth Numbers

M/I Homes, Inc. has seen its earnings per share (EPS) increase by 28% a year over the past three years. It achieved revenue growth of 11% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

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

M/I Homes, Inc. has served shareholders reasonably well, with a total return of 23% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

As we touched on above, M/I Homes, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But earnings growth over the last three years has been impressive, although the same cannot be said for shareholder returns. So considering these factors, we think the compensation is probably quite reasonable, but investor returns need a boost moving forward.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 5 warning signs for M/I Homes (2 are concerning!) that you should be aware of before investing here.

Important note: M/I Homes 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.

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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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