Scott Slater became the CEO of Cadiz Inc. (NASDAQ:CDZI) in 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Scott Slater's Compensation Compare With Similar Sized Companies?
According to our data, Cadiz Inc. has a market capitalization of US$279m, and paid its CEO total annual compensation worth US$600k over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$300k. When we examined a selection of companies with market caps ranging from US$100m to US$400m, we found the median CEO total compensation was US$1.1m.
Most shareholders would consider it a positive that Scott Slater takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at Cadiz, below.
Is Cadiz Inc. Growing?
On average over the last three years, Cadiz Inc. has grown earnings per share (EPS) by 11% each year (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.
This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.
Has Cadiz Inc. Been A Good Investment?
Given the total loss of 12% over three years, many shareholders in Cadiz Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
It appears that Cadiz Inc. remunerates its CEO below most similar sized companies.
Many would consider this to indicate that the pay is modest since the business is growing. Unfortunately, some shareholders may be disappointed with their returns, given the company's performance over the last three years. So while we don't think, Scott Slater is paid too much, shareholders may hope that business performance translates to investment returns before pay rises are given out. When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. Whatever your view on compensation, you might want to check if insiders are buying or selling Cadiz shares (free trial).
Important note: Cadiz may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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