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This article will reflect on the compensation paid to Lester Brafman who has served as CEO of Cohen & Company Inc. (NYSEMKT:COHN) since 2013. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Cohen.
How Does Total Compensation For Lester Brafman Compare With Other Companies In The Industry?
At the time of writing, our data shows that Cohen & Company Inc. has a market capitalization of US$69m, and reported total annual CEO compensation of US$903k for the year to December 2019. We note that's a decrease of 30% compared to last year. In particular, the salary of US$630.0k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$400k. Hence, we can conclude that Lester Brafman is remunerated higher than the industry median. Furthermore, Lester Brafman directly owns US$5.3m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, roughly 14% of total compensation represents salary and 86% is other remuneration. Cohen is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Cohen & Company Inc.'s Growth
Cohen & Company Inc. has reduced its earnings per share by 32% a year over the last three years. In the last year, its revenue is up 68%.
The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Cohen & Company Inc. Been A Good Investment?
Boasting a total shareholder return of 154% over three years, Cohen & Company Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As we touched on above, Cohen & Company Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But Cohen is growing its revenue, and total shareholder returns have also been pleasing for the last three years. Importantly though, EPS has not been growing over the same stretch. Considering all the factors, we would have to say CEO pay is fair; however, moving forward, it would be nice to see EPS growth from the company as well.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 5 warning signs for Cohen (2 shouldn't be ignored!) that you should be aware of before investing here.
Switching gears from Cohen, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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