John Ambroseo became the CEO of Coherent, Inc. (NASDAQ:COHR) in 2002. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does John Ambroseo’s Compensation Compare With Similar Sized Companies?
Our data indicates that Coherent, Inc. is worth US$4.0b, and total annual CEO compensation was reported as US$9.5m for the year to September 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$800k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.1m.
Thus we can conclude that John Ambroseo receives more in total compensation than the median of a group of companies in the same market, and of similar size to Coherent, Inc.. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Coherent has changed over time.
Is Coherent, Inc. Growing?
On average over the last three years, Coherent, Inc. has grown earnings per share (EPS) by 7.1% each year (using a line of best fit). In the last year, its revenue is down 25%.
I generally like to see a little revenue growth, but it is good to see EPS growth. These two metric are moving in different directions, so while it’s hard to be confident judging performance, we think the stock is worth watching. You might want to check this free visual report on analyst forecasts for future earnings.
Has Coherent, Inc. Been A Good Investment?
Coherent, Inc. has served shareholders reasonably well, with a total return of 23% over three years. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We examined the amount Coherent, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
One might like to have seen stronger growth, and the shareholder returns have failed to inspire, over the last three years. So it’s certainly hard to argue that the CEO is modestly paid, although we don’t see the remuneration as an issue. So you may want to check if insiders are buying Coherent shares with their own money (free access).
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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