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Is Charles & Colvard Ltd (NASDAQ:CTHR) Overpaying Its CEO?

Suzanne Miglucci became the CEO of Charles & Colvard Ltd (NASDAQ:CTHR) in 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Charles & Colvard

How Does Suzanne Miglucci’s Compensation Compare With Similar Sized Companies?

According to our data, Charles & Colvard Ltd has a market capitalization of US$23m, and pays its CEO total annual compensation worth US$520k. That’s a modest increase of 3.6% on the prior year year. We looked at a group of companies with market capitalizations under US$200m, and the median CEO compensation was US$292k.

Thus we can conclude that Suzanne Miglucci receives more in total compensation than the median of a group of companies in the same market, and of similar size to Charles & Colvard Ltd. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see a visual representation of the CEO compensation at Charles & Colvard, below.

NasdaqCM:CTHR CEO Compensation November 5th 18
NasdaqCM:CTHR CEO Compensation November 5th 18

Is Charles & Colvard Ltd Growing?

On average over the last three years, Charles & Colvard Ltd has grown earnings per share (EPS) by 49% each year. Its revenue is up 8.9% over last year.

This demonstrates that the company has been improving recently. A good result. It’s also good to see modest revenue growth, suggesting the underlying business is healthy.

Although we don’t have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Charles & Colvard Ltd Been A Good Investment?

Since shareholders would have lost about 25% over three years, some Charles & Colvard Ltd shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We compared the total CEO remuneration paid by Charles & Colvard Ltd, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. While EPS is positive, we’d say shareholders would want better returns before the CEO is paid much more. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Charles & Colvard Ltd (free visualization of insider trades).

Or you might rather take a peek at this analytical visualization of historic cash flow, earnings and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.