Under the guidance of CEO Andrew Bennett, COG Financial Services Limited (ASX:COG) has performed reasonably well recently. As shareholders go into the upcoming AGM on 28 November 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Here is our take on why we think the CEO compensation looks appropriate.
Comparing COG Financial Services Limited's CEO Compensation With the industry
According to our data, COG Financial Services Limited has a market capitalization of AU$267m, and paid its CEO total annual compensation worth AU$905k over the year to June 2021. Notably, that's an increase of 60% over the year before. Notably, the salary which is AU$459.8k, represents a considerable chunk of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations ranging from AU$138m to AU$551m, the reported median CEO total compensation was AU$1.0m. So it looks like COG Financial Services compensates Andrew Bennett in line with the median for the industry. What's more, Andrew Bennett holds AU$93k worth of shares in the company in their own name.
On an industry level, roughly 57% of total compensation represents salary and 43% is other remuneration. COG Financial Services sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
COG Financial Services Limited's Growth
Over the last three years, COG Financial Services Limited has shrunk its earnings per share by 113% per year. It achieved revenue growth of 24% over the last year.
The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has COG Financial Services Limited Been A Good Investment?
COG Financial Services Limited has served shareholders reasonably well, with a total return of 32% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
The overall company performance has been commendable, however there are still areas for improvement. Still, we think that until shareholders see an improvement in EPS growth, they may find it hard to justify a pay rise for the CEO.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for COG Financial Services (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from COG Financial Services, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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.
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