Alison Watkins has been the CEO of Coca-Cola Amatil Limited (ASX:CCL) since 2014. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Alison Watkins's Compensation Compare With Similar Sized Companies?
Our data indicates that Coca-Cola Amatil Limited is worth AU$6.4b, and total annual CEO compensation is AU$4.1m. (This figure is for the year to December 2018). That's below the compensation, last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$2.2m. We looked at a group of companies with market capitalizations from AU$2.8b to AU$9.1b, and the median CEO total compensation was AU$3.3m.
So Alison Watkins is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Coca-Cola Amatil has changed from year to year.
Is Coca-Cola Amatil Limited Growing?
Coca-Cola Amatil Limited has increased its earnings per share (EPS) by an average of 9.0% a year, over the last three years (using a line of best fit). It achieved revenue growth of 1.1% over the last year.
I'm not particularly impressed by the revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. It could be important to check this free visual depiction of what analysts expect for the future.
Has Coca-Cola Amatil Limited Been A Good Investment?
With a total shareholder return of 20% over three years, Coca-Cola Amatil Limited shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
Alison Watkins is paid around what is normal the leaders of comparable size companies.
We see room for improved growth, as well as fairly unremarkable returns over the last three years. While there is room for improvement, we haven't seen evidence to suggest the pay is too generous. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Coca-Cola Amatil (free visualization of insider trades).
If you want to buy a stock that is better than Coca-Cola Amatil, this free list of high return, low debt companies is a great place to look.
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