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Is Costa Group Holdings Limited's (ASX:CGC) CEO Paid Enough Relative To Peers?

Simply Wall St

Harry Debney became the CEO of Costa Group Holdings Limited (ASX:CGC) in 2010. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Costa Group Holdings

How Does Harry Debney's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Costa Group Holdings Limited has a market cap of AU$1.2b, and is paying total annual CEO compensation of AU$1.3m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at AU$501k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of AU$593m to AU$2.4b. The median total CEO compensation was AU$1.4m.

So Harry Debney receives a similar amount to the median CEO pay, amongst 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 Costa Group Holdings has changed from year to year.

ASX:CGC CEO Compensation, August 16th 2019
ASX:CGC CEO Compensation, August 16th 2019

Is Costa Group Holdings Limited Growing?

On average over the last three years, Costa Group Holdings Limited has grown earnings per share (EPS) by 44% each year (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.

This demonstrates that the company has been improving recently. A good result. It's also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.

Has Costa Group Holdings Limited Been A Good Investment?

Costa Group Holdings Limited has served shareholders reasonably well, with a total return of 31% over three years. 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.

In Summary...

Remuneration for Harry Debney is close enough to the median pay for a CEO of a similar sized company .

The company is growing EPS but shareholder returns have been sound but not amazing. As a result of these considerations, I would suggest the CEO pay is reasonable. Shareholders may want to check for free if Costa Group Holdings insiders are buying or selling shares.

Important note: Costa Group Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.