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How Much Does Cokal's (ASX:CKA) CEO Make?

Simply Wall St
·3 min read

This article will reflect on the compensation paid to Jim Coleman who has served as CEO of Cokal Limited (ASX:CKA) since 2018. This analysis will also assess whether Cokal pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Cokal

Comparing Cokal Limited's CEO Compensation With the industry

At the time of writing, our data shows that Cokal Limited has a market capitalization of AU$69m, and reported total annual CEO compensation of US$187k for the year to June 2020. Notably, that's a decrease of 25% over the year before. We note that the salary portion, which stands at US$131.5k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under AU$260m, the reported median total CEO compensation was US$234k. This suggests that Cokal remunerates its CEO largely in line with the industry average. Furthermore, Jim Coleman directly owns AU$343k worth of shares in the company.

Component

2020

2019

Proportion (2020)

Salary

US$131k

US$165k

70%

Other

US$56k

US$84k

30%

Total Compensation

US$187k

US$249k

100%

Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. Although there is a difference in how total compensation is set, Cokal more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
ceo-compensation

A Look at Cokal Limited's Growth Numbers

Cokal Limited has seen its earnings per share (EPS) increase by 74% a year over the past three years. Its revenue is up 83% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Cokal Limited Been A Good Investment?

Given the total shareholder loss of 7.3% over three years, many shareholders in Cokal Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we noted earlier, Cokal pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, the company has logged negative shareholder returns over the previous three years. However, EPS growth is positive over the same time frame. Overall, we wouldn't say Jim is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 1 which doesn't sit too well with us) in Cokal we think you should know about.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.