Shareholders May Not Be So Generous With Toll Brothers, Inc.'s (NYSE:TOL) CEO Compensation And Here's Why

Key Insights

• Toll Brothers will host its Annual General Meeting on 11th of March
• Salary of US$1.20m is part of CEO Doug Yearley's total remuneration
• Total compensation is 35% above industry average
• Toll Brothers' EPS grew by 28% over the past three years while total shareholder return over the past three years was 129%

Under the guidance of CEO Doug Yearley, Toll Brothers, Inc. (NYSE:TOL) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 11th of March. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Toll Brothers

Comparing Toll Brothers, Inc.'s CEO Compensation With The Industry

According to our data, Toll Brothers, Inc. has a market capitalization of US$11b, and paid its CEO total annual compensation worth US$16m over the year to October 2024. Notably, that's an increase of 8.7% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.2m.

On comparing similar companies in the American Consumer Durables industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$12m. This suggests that Doug Yearley is paid more than the median for the industry. What's more, Doug Yearley holds US$43m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	US$1.2m	US$1.2m	7%
Other	US$15m	US$14m	93%
Total Compensation	US$16m	US$15m	100%

Talking in terms of the industry, salary represented approximately 21% of total compensation out of all the companies we analyzed, while other remuneration made up 79% of the pie. Toll Brothers pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Toll Brothers, Inc.'s Growth Numbers

Over the past three years, Toll Brothers, Inc. has seen its earnings per share (EPS) grow by 28% per year. In the last year, its revenue is up 5.9%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Toll Brothers, Inc. Been A Good Investment?

Boasting a total shareholder return of 129% over three years, Toll Brothers, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Toll Brothers 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. 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.