Why is the Beacon Lighting (ASX:BLX) share price jumping 7% to record highs?

Beacon turned on the party lights to end the week with a record high share price…

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Happy woman stringing lights at an outside party.

Image source: Getty Images

What better way to end the week than to set an all-time high. That is exactly what the Beacon Lighting Group Ltd (ASX: BLX) share price ended up doing today.

At the end of Friday’s session, shares in the lighting retailer were 6.82% higher to $2.35. However, the surging share price reached an intraday high of $2.41 around lunchtime — cementing a new record high price for the company. Prior to this, we would have to go all the way back to 2015 to see a share price close to this.

While the achievement is notable, the catalyst for the rise is somewhat a mystery. Though, there are a couple of points that could be worth looking at.

Stability brought to management

This afternoon, an announcement was released relating to performance rights and options in the company. According to the release, a total of 215,352 performance rights with a zero exercise price have been issued to Beacon Lighting executives.

Furthermore, these options have an expiration date of 24 June 2031. Though, the important detail is that two-thirds of these options will be subject to terms of employment. Namely, the executives will need to still be employed on 19 August 2022 and 19 August 2023 to exercise these issued options.

Perhaps investors were optimistic about this news, as it incentivises the current management team to stay right where they are, rather than suddenly upending themselves. Hence, the options incentive can help reduce volatility inside the company, which would be good for the Beacon Lighting share price.

Additionally, the results of the company’s annual general meeting were decided on Tuesday. The outcomes included the re-election of deputy chair Eric Barr; adoption of the remuneration report; and the issuing of performance rights to CEO Glen Robinson.

Beacon Lighting share price snapshot

Shareholders of the lighting retailer have far exceeded benchmark returns over the 12 months. Specifically, the Beacon Lighting share price has returned 80.8% in the past year. For context, the S&P/ASX 200 Index (ASX: XJO) gained 20% during the same timeframe.

In addition, the company not only kept paying shareholders dividends but also increased the payments in 2021. Total dividends paid this year are 8.8 cents per share — representing a 76% increase on 2020.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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