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Is Cooper-Standard Holdings Inc.'s (NYSE:CPS) CEO Being Overpaid?

Simply Wall St

Jeff Edwards became the CEO of Cooper-Standard Holdings Inc. (NYSE:CPS) in 2012. 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 - 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.

View our latest analysis for Cooper-Standard Holdings

How Does Jeff Edwards's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Cooper-Standard Holdings Inc. has a market cap of US$602m, and reported total annual CEO compensation of US$4.2m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$981k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.8m.

As you can see, Jeff Edwards is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Cooper-Standard Holdings Inc. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at Cooper-Standard Holdings has changed from year to year.

NYSE:CPS CEO Compensation, October 15th 2019

Is Cooper-Standard Holdings Inc. Growing?

Cooper-Standard Holdings Inc. has reduced its earnings per share by an average of 6.4% a year, over the last three years (measured with a line of best fit). Its revenue is down 8.8% over last year.

Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.

Has Cooper-Standard Holdings Inc. Been A Good Investment?

Given the total loss of 63% over three years, many shareholders in Cooper-Standard Holdings Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared total CEO remuneration at Cooper-Standard Holdings Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

We think many shareholders would be underwhelmed with the business growth over the last three years. Over the same period, investors would have come away with nothing in the way of share price gains. Some might well form the view that the CEO is paid too generously! So you may want to check if insiders are buying Cooper-Standard Holdings shares with their own money (free access).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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. Thank you for reading.