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Is Calavo Growers, Inc. (NASDAQ:CVGW) Excessively Paying Its CEO?

Simply Wall St

Lee Cole became the CEO of Calavo Growers, Inc. (NASDAQ:CVGW) in 1999. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Calavo Growers

How Does Lee Cole's Compensation Compare With Similar Sized Companies?

According to our data, Calavo Growers, Inc. has a market capitalization of US$1.5b, and pays its CEO total annual compensation worth US$1.5m. (This is based on the year to October 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$741k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$4.1m.

A first glance this seems like a real positive for shareholders, since Lee Cole is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.

You can see a visual representation of the CEO compensation at Calavo Growers, below.

NasdaqGS:CVGW CEO Compensation, August 5th 2019

Is Calavo Growers, Inc. Growing?

Earnings per share at Calavo Growers, Inc. are much the same as they were three years ago, albeit slightly lower, based on the trend. It achieved revenue growth of 2.7% over the last year.

The lack of earnings per share growth in the last three years is unimpressive. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.

Has Calavo Growers, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Calavo Growers, Inc. for providing a total return of 39% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

It appears that Calavo Growers, Inc. remunerates its CEO below most similar sized companies.

Lee Cole is paid less than CEOs of similar size companies. While the company isn't growing on our analysis, shareholder returns have been good in recent years. We would like to see EPS growth, but in our view it seems the CEO is remunerated reasonably. Shareholders may want to check for free if Calavo Growers insiders are buying or selling shares.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.