Key Insights

• Porch Group will host its Annual General Meeting on 12th of June
• Total pay for CEO Matt Ehrlichman includes US$600.0k salary
• The overall pay is 184% above the industry average
• Over the past three years, Porch Group's EPS grew by 3.0% and over the past three years, the total loss to shareholders 90%

In the past three years, the share price of Porch Group, Inc. (NASDAQ:PRCH) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 12th of June. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

How Does Total Compensation For Matt Ehrlichman Compare With Other Companies In The Industry?

According to our data, Porch Group, Inc. has a market capitalization of US$190m, and paid its CEO total annual compensation worth US$4.3m over the year to December 2023. That's a notable decrease of 69% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$600k.

In comparison with other companies in the American Software industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$1.5m. This suggests that Matt Ehrlichman is paid more than the median for the industry. Furthermore, Matt Ehrlichman directly owns US$39m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 16% of total compensation represents salary and 84% is other remuneration. Porch Group pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Porch Group, Inc.'s Growth

Porch Group, Inc.'s earnings per share (EPS) grew 3.0% per year over the last three years. It achieved revenue growth of 53% over the last year.

It's hard to interpret the strong revenue growth as anything other than a positive. Combined with modest EPS growth, we get a good impression of the company. We'd stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Porch Group, Inc. Been A Good Investment?

With a total shareholder return of -90% over three years, Porch Group, Inc. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Porch Group (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Porch Group, 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. 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.