Brad Hughes became the CEO of Cooper Tire & Rubber Company (NYSE:CTB) in 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Brad Hughes's Compensation Compare With Similar Sized Companies?
Our data indicates that Cooper Tire & Rubber Company is worth US$1.3b, and total annual CEO compensation was reported as US$4.5m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$958k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$4.1m.
That means Brad Hughes receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see a visual representation of the CEO compensation at Cooper Tire & Rubber, below.
Is Cooper Tire & Rubber Company Growing?
On average over the last three years, Cooper Tire & Rubber Company has shrunk earnings per share by 52% each year (measured with a line of best fit). Revenue was pretty flat on last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the flat revenue hardly impresses. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Cooper Tire & Rubber Company Been A Good Investment?
With a three year total loss of 32%, Cooper Tire & Rubber Company would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
Brad Hughes is paid around what is normal the leaders of comparable size companies.
After looking at EPS and total shareholder returns, it's certainly hard to argue the company has performed well, since both metrics are down. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. Whatever your view on compensation, you might want to check if insiders are buying or selling Cooper Tire & Rubber shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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