Despite Maui Land & Pineapple Company, Inc.'s (NYSE:MLP) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. The upcoming AGM on 28 April 2021 may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.
Comparing Maui Land & Pineapple Company, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that Maui Land & Pineapple Company, Inc. has a market capitalization of US$219m, and reported total annual CEO compensation of US$1.4m for the year to December 2020. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$415k.
On examining similar-sized companies in the industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$887k. Accordingly, our analysis reveals that Maui Land & Pineapple Company, Inc. pays Warren Haruki north of the industry median. Furthermore, Warren Haruki directly owns US$5.7m worth of shares in the company, implying that they are deeply invested in the company's success.
Speaking on an industry level, nearly 29% of total compensation represents salary, while the remainder of 71% is other remuneration. Our data reveals that Maui Land & Pineapple Company allocates salary more or less in line with the wider market. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Maui Land & Pineapple Company, Inc.'s Growth
Over the last three years, Maui Land & Pineapple Company, Inc. has shrunk its earnings per share by 89% per year. In the last year, its revenue is down 25%.
The decline in EPS is a bit concerning. 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Maui Land & Pineapple Company, Inc. Been A Good Investment?
Maui Land & Pineapple Company, Inc. has not done too badly by shareholders, with a total return of 7.2%, over three years. It would be nice to see that metric improve in the future. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.
Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Maui Land & Pineapple Company that investors should think about before committing capital to this stock.
Switching gears from Maui Land & Pineapple Company, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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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