In 2011 David Maxwell was appointed CEO of Cooper Energy Limited (ASX:COE). First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does David Maxwell's Compensation Compare With Similar Sized Companies?
According to our data, Cooper Energy Limited has a market capitalization of AU$919m, and paid its CEO total annual compensation worth AU$2.3m over the year to June 2019. While we always look at total compensation first, we note that the salary component is less, at . Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from AU$597m to AU$2.4b, we found the median CEO total compensation was AU$1.4m.
Thus we can conclude that David Maxwell receives more in total compensation than the median of a group of companies in the same market, and of similar size to Cooper Energy Limited. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Cooper Energy has changed over time.
Is Cooper Energy Limited Growing?
Cooper Energy Limited has increased its earnings per share (EPS) by an average of 73% a year, over the last three years (using a line of best fit). Its revenue is up 12% over last year.
This demonstrates that the company has been improving recently. A good result. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Cooper Energy Limited Been A Good Investment?
Boasting a total shareholder return of 63% over three years, Cooper Energy Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
We compared the total CEO remuneration paid by Cooper Energy Limited, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. So, considering this good performance, the CEO compensation may be quite appropriate. Shareholders may want to check for free if Cooper Energy insiders are buying or selling shares.
If you want to buy a stock that is better than Cooper Energy, this free list of high return, low debt companies is a great place to look.
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