In 2004 Rick McTaggart was appointed CEO of Consolidated Water Co. Ltd. (NASDAQ:CWCO). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.
How Does Rick McTaggart's Compensation Compare With Similar Sized Companies?
According to our data, Consolidated Water Co. Ltd. has a market capitalization of US$212m, and pays its CEO total annual compensation worth US$1.1m. (This is based on the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$468k. When we examined a selection of companies with market caps ranging from US$100m to US$400m, we found the median CEO total compensation was US$1.2m.
So Rick McTaggart is paid around the average of 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.
You can see, below, how CEO compensation at Consolidated Water has changed over time.
Is Consolidated Water Co. Ltd. Growing?
Over the last three years Consolidated Water Co. Ltd. has grown its earnings per share (EPS) by an average of 33% per year (using a line of best fit). In the last year, its revenue is up 23%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Consolidated Water Co. Ltd. Been A Good Investment?
Consolidated Water Co. Ltd. has generated a total shareholder return of 17% over three years, so most shareholders would be reasonably content. 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.
Rick McTaggart is paid around what is normal the leaders of comparable size companies.
The company is growing EPS but shareholder returns have been sound but not amazing. So upon reflection one could argue that the CEO pay is quite reasonable. Shareholders may want to check for free if Consolidated Water insiders are buying or selling shares.
Important note: Consolidated Water 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.
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