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Is Cooks Global Foods Limited's (NZSE:CGF) CEO Paid Enough Relative To Peers?

Simply Wall St

The CEO of Cooks Global Foods Limited (NZSE:CGF) is Graeme Jackson. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Cooks Global Foods

How Does Graeme Jackson's Compensation Compare With Similar Sized Companies?

Our data indicates that Cooks Global Foods Limited is worth NZ$32m, and total annual CEO compensation was reported as NZ$180k for the year to March 2019. Notably, the salary of NZ$180k is the vast majority of the CEO compensation. We examined a group of similar sized companies, with market capitalizations of below NZ$301m. The median CEO total compensation in that group is NZ$421k.

A first glance this seems like a real positive for shareholders, since Graeme Jackson is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business.

You can see a visual representation of the CEO compensation at Cooks Global Foods, below.

NZSE:CGF CEO Compensation, January 11th 2020

Is Cooks Global Foods Limited Growing?

Cooks Global Foods Limited has reduced its earnings per share by an average of 7.9% a year, over the last three years (measured with a line of best fit). Its revenue is up 1.2% over last year.

Sadly for shareholders, earnings per share are actually down, over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Cooks Global Foods Limited Been A Good Investment?

With a three year total loss of 28%, Cooks Global Foods Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Cooks Global Foods Limited is currently paying its CEO below what is normal for companies of its size.

The compensation paid to Graeme Jackson is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). While one could argue it is appropriate for the CEO to be paid less than other CEOs of similar sized companies, given company performance, we would not call the pay overly generous. So you may want to check if insiders are buying Cooks Global Foods shares with their own money (free access).

If you want to buy a stock that is better than Cooks Global Foods, this free list of high return, low debt companies is a great place to look.

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.

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