Andy Gordon became the CEO of Coffee Holding Co., Inc. (NASDAQ:JVA) in 1997. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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.
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
How Does Andy Gordon's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Coffee Holding Co., Inc. has a market cap of US$27m, and is paying total annual CEO compensation of US$387k. (This figure is for the year to October 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$357k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$446k.
So Andy Gordon is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Coffee Holding has changed from year to year.
Is Coffee Holding Co., Inc. Growing?
Coffee Holding Co., Inc. has reduced its earnings per share by an average of 6.9% a year, over the last three years (measured with a line of best fit). Its revenue is up 16% over last year.
Unfortunately, earnings per share have trended lower over the last three years. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Coffee Holding Co., Inc. Been A Good Investment?
I think that the total shareholder return of 38%, over three years, would leave most Coffee Holding Co., Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Andy Gordon is paid around what is normal the leaders of comparable size companies.
We feel that earnings per share have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So we can't see a reason to suggest the pay is inappropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Coffee Holding (free visualization of insider trades).
If you want to buy a stock that is better than Coffee Holding, this free list of high return, low debt companies is a great place to look.
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 firstname.lastname@example.org. 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.