Here's Why We Think The Cooper Companies, Inc.'s (NASDAQ:COO) CEO Compensation Looks Fair for the time being
Key Insights
Cooper Companies will host its Annual General Meeting on 19th of March
Salary of US$1.05m is part of CEO Al White's total remuneration
The total compensation is similar to the average for the industry
Cooper Companies' total shareholder return over the past three years was 6.3% while its EPS was down 50% over the past three years
Despite The Cooper Companies, Inc.'s (NASDAQ:COO) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 19th of March. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.
See our latest analysis for Cooper Companies
How Does Total Compensation For Al White Compare With Other Companies In The Industry?
According to our data, The Cooper Companies, Inc. has a market capitalization of US$20b, and paid its CEO total annual compensation worth US$13m over the year to October 2023. That's a notable increase of 15% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.
For comparison, other companies in the American Medical Equipment industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$13m. So it looks like Cooper Companies compensates Al White in line with the median for the industry. Furthermore, Al White directly owns US$17m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.1m | US$925k | 8% |
Other | US$12m | US$11m | 92% |
Total Compensation | US$13m | US$12m | 100% |
On an industry level, roughly 27% of total compensation represents salary and 73% is other remuneration. Cooper Companies pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at The Cooper Companies, Inc.'s Growth Numbers
The Cooper Companies, Inc. has reduced its earnings per share by 50% a year over the last three years. In the last year, its revenue is up 8.5%.
Overall this is not a very positive result for shareholders. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has The Cooper Companies, Inc. Been A Good Investment?
The Cooper Companies, Inc. has not done too badly by shareholders, with a total return of 6.3%, over three years. It would be nice to see that metric improve in the future. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.
In Summary...
Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.
Shareholders may want to check for free if Cooper Companies insiders are buying or selling shares.
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.
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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.
