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Why Cadiz's (NASDAQ:CDZI) CEO Pay Matters

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Simply Wall St
·3 min read
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This article will reflect on the compensation paid to Scott Slater who has served as CEO of Cadiz Inc. (NASDAQ:CDZI) since 2013. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Cadiz.

View our latest analysis for Cadiz

Comparing Cadiz Inc.'s CEO Compensation With the industry

According to our data, Cadiz Inc. has a market capitalization of US$354m, and paid its CEO total annual compensation worth US$500k over the year to December 2019. Notably, that's a decrease of 17% over the year before. Notably, the salary which is US$300.0k, represents most of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$341k. Hence, we can conclude that Scott Slater is remunerated higher than the industry median. What's more, Scott Slater holds US$299k worth of shares in the company in their own name.

Component

2019

2018

Proportion (2019)

Salary

US$300k

US$300k

60%

Other

US$200k

US$300k

40%

Total Compensation

US$500k

US$600k

100%

On an industry level, roughly 35% of total compensation represents salary and 65% is other remuneration. According to our research, Cadiz has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ceo-compensation
ceo-compensation

Cadiz Inc.'s Growth

Cadiz Inc. has seen its earnings per share (EPS) increase by 6.1% a year over the past three years. Its revenue is up 9.0% over the last year.

We'd prefer higher revenue growth, but we're happy with the modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Cadiz Inc. Been A Good Investment?

Since shareholders would have lost about 21% over three years, some Cadiz Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we touched on above, Cadiz Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Over the last three years, shareholder returns have been downright disappointing for Cadiz, and although EPS growth is steady, it hasn't set the world on fire. And the situation doesn't look all that good when you see Scott is remunerated higher than the industry average. All things considered, we believe shareholders would be disappointed to see Scott's compensation grow without first seeing an improvement in the performance of the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 4 warning signs (and 3 which don't sit too well with us) in Cadiz we think you should know about.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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@simplywallst.com.