Here's Why We Think COG Financial Services Limited's (ASX:COG) CEO Compensation Looks Fair for the time being
CEO Andrew Bennett has done a decent job of delivering relatively good performance at COG Financial Services Limited (ASX:COG) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 28 November 2021. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.
View our latest analysis for COG Financial Services
How Does Total Compensation For Andrew Bennett Compare With Other Companies In The Industry?
At the time of writing, our data shows that COG Financial Services Limited has a market capitalization of AU$267m, and reported total annual CEO compensation of AU$905k for the year to June 2021. Notably, that's an increase of 60% over the year before. We note that the salary of AU$459.8k makes up a sizeable portion of the total compensation received by the CEO.
On examining similar-sized companies in the industry with market capitalizations between AU$138m and AU$551m, we discovered that the median CEO total compensation of that group was AU$1.0m. So it looks like COG Financial Services compensates Andrew Bennett in line with the median for the industry. Furthermore, Andrew Bennett directly owns AU$93k worth of shares in the company.
Component | 2021 | 2020 | Proportion (2021) |
Salary | AU$460k | AU$366k | 51% |
Other | AU$445k | AU$200k | 49% |
Total Compensation | AU$905k | AU$565k | 100% |
On an industry level, roughly 57% of total compensation represents salary and 43% is other remuneration. It's interesting to note that COG Financial Services allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
COG Financial Services Limited's Growth
Over the last three years, COG Financial Services Limited has shrunk its earnings per share by 113% per year. Its revenue is up 24% over the last year.
The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has COG Financial Services Limited Been A Good Investment?
COG Financial Services Limited has generated a total shareholder return of 32% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
The overall company performance has been commendable, however there are still areas for improvement. Despite robust revenue growth, until EPS growth improves, shareholders may be hesitant to increase CEO pay by too much.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for COG Financial Services you should be aware of, and 1 of them is concerning.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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