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Is Codan Limited's (ASX:CDA) CEO Paid At A Competitive Rate?

Simply Wall St

Donald McGurk became the CEO of Codan Limited (ASX:CDA) in 2010. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Codan

How Does Donald McGurk's Compensation Compare With Similar Sized Companies?

According to our data, Codan Limited has a market capitalization of AU$1.3b, and paid its CEO total annual compensation worth AU$1.2m over the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$548k. We examined companies with market caps from AU$573m to AU$2.3b, and discovered that the median CEO total compensation of that group was AU$1.4m.

That means Donald McGurk receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see, below, how CEO compensation at Codan has changed over time.

ASX:CDA CEO Compensation, December 30th 2019

Is Codan Limited Growing?

Codan Limited has increased its earnings per share (EPS) by an average of 22% a year, over the last three years (using a line of best fit). Its revenue is up 18% over last year.

This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Codan Limited Been A Good Investment?

I think that the total shareholder return of 330%, over three years, would leave most Codan Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Donald McGurk is paid around the same as most CEOs of similar size companies.

Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Indeed, many might consider the pay rather modest, given the solid company performance! So you may want to check if insiders are buying Codan shares with their own money (free access).

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.

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.

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. Thank you for reading.