Bluegreen Vacations Holding Corporation's (NYSE:BVH) CEO Might Not Expect Shareholders To Be So Generous This Year

Shareholders will probably not be too impressed with the underwhelming results at Bluegreen Vacations Holding Corporation (NYSE:BVH) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 21 July 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Bluegreen Vacations Holding

Comparing Bluegreen Vacations Holding Corporation's CEO Compensation With the industry

At the time of writing, our data shows that Bluegreen Vacations Holding Corporation has a market capitalization of US$372m, and reported total annual CEO compensation of US$9.4m for the year to December 2020. That's just a smallish increase of 7.4% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.6m.

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$2.0m. Accordingly, our analysis reveals that Bluegreen Vacations Holding Corporation pays Alan Levan north of the industry median. Moreover, Alan Levan also holds US$33m worth of Bluegreen Vacations Holding stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	US$1.6m	US$1.5m	17%
Other	US$7.8m	US$7.2m	83%
Total Compensation	US$9.4m	US$8.7m	100%

On an industry level, roughly 22% of total compensation represents salary and 78% is other remuneration. Bluegreen Vacations Holding sets aside a smaller share of compensation for salary, in comparison to the overall 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 Bluegreen Vacations Holding Corporation's Growth Numbers

Over the last three years, Bluegreen Vacations Holding Corporation has shrunk its earnings per share by 121% per year. Its revenue is down 33% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Bluegreen Vacations Holding Corporation Been A Good Investment?

The return of -50% over three years would not have pleased Bluegreen Vacations Holding Corporation shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Bluegreen Vacations Holding you should be aware of, and 1 of them doesn't sit too well with us.

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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