This article will reflect on the compensation paid to Sheryl Palmer who has served as CEO of Taylor Morrison Home Corporation (NYSE:TMHC) since 2012. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Taylor Morrison Home.
Comparing Taylor Morrison Home Corporation's CEO Compensation With the industry
Our data indicates that Taylor Morrison Home Corporation has a market capitalization of US$3.4b, and total annual CEO compensation was reported as US$8.3m for the year to December 2019. We note that's an increase of 23% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.0m.
For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$9.3m. From this we gather that Sheryl Palmer is paid around the median for CEOs in the industry. Moreover, Sheryl Palmer also holds US$6.3m worth of Taylor Morrison Home stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Speaking on an industry level, nearly 27% of total compensation represents salary, while the remainder of 73% is other remuneration. Taylor Morrison Home sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Taylor Morrison Home Corporation's Growth
Taylor Morrison Home Corporation has reduced its earnings per share by 1.6% a year over the last three years. Its revenue is up 27% over the last year.
Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Taylor Morrison Home Corporation Been A Good Investment?
With a total shareholder return of 9.0% over three years, Taylor Morrison Home Corporation has done okay by shareholders. 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.
As we touched on above, Taylor Morrison Home Corporation 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 revenue growth over the last year can't be ignored. That's why we were hoping for more robust shareholder returns at this time. An additional worry is EPS , which has posted negative growth in the previous three years. There's certainly room for improvement, but CEO compensation seems reasonable, considering the company's steady performance.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 3 warning signs for Taylor Morrison Home that investors should be aware of in a dynamic business environment.
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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