We Think Shareholders Will Probably Be Generous With Meritage Homes Corporation's (NYSE:MTH) CEO Compensation

Key Insights

• Meritage Homes to hold its Annual General Meeting on 16th of May
• Salary of US$900.0k is part of CEO Phillippe Lord's total remuneration
• Total compensation is similar to the industry average
• Over the past three years, Meritage Homes' EPS grew by 19% and over the past three years, the total shareholder return was 65%

The performance at Meritage Homes Corporation (NYSE:MTH) has been quite strong recently and CEO Phillippe Lord has played a role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 16th of May. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

Check out our latest analysis for Meritage Homes

How Does Total Compensation For Phillippe Lord Compare With Other Companies In The Industry?

According to our data, Meritage Homes Corporation has a market capitalization of US$6.6b, and paid its CEO total annual compensation worth US$11m over the year to December 2023. We note that's an increase of 35% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$900k.

For comparison, other companies in the American Consumer Durables industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$11m. From this we gather that Phillippe Lord is paid around the median for CEOs in the industry. What's more, Phillippe Lord holds US$18m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	US$900k	US$900k	8%
Other	US$9.9m	US$7.1m	92%
Total Compensation	US$11m	US$8.0m	100%

Speaking on an industry level, nearly 17% of total compensation represents salary, while the remainder of 83% is other remuneration. It's interesting to note that Meritage 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 Meritage Homes Corporation's Growth Numbers

Meritage Homes Corporation's earnings per share (EPS) grew 19% per year over the last three years. The trailing twelve months of revenue was pretty much the same as the prior period.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Meritage Homes Corporation Been A Good Investment?

Boasting a total shareholder return of 65% over three years, Meritage Homes Corporation 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...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Meritage Homes (1 can't be ignored!) that you should be aware of before investing here.

Important note: Meritage 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.