Is Costa Group Holdings Limited’s (ASX:CGC) CEO Overpaid Relative To Its Peers?

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Harry Debney has been the CEO of Costa Group Holdings Limited (ASX:CGC) since 2010. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Costa Group Holdings

How Does Harry Debney’s Compensation Compare With Similar Sized Companies?

According to our data, Costa Group Holdings Limited has a market capitalization of AU$1.4b, and pays its CEO total annual compensation worth AU$1.3m. (This is based on the year to December 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at AU$501k. We examined companies with market caps from AU$571m to AU$2.3b, and discovered that the median CEO total compensation of that group was AU$1.4m.

So Harry Debney receives a similar amount to the median CEO pay, amongst the companies we looked at. 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, below, how CEO compensation at Costa Group Holdings has changed over time.

ASX:CGC CEO Compensation, July 15th 2019
ASX:CGC CEO Compensation, July 15th 2019

Is Costa Group Holdings Limited Growing?

On average over the last three years, Costa Group Holdings Limited has grown earnings per share (EPS) by 44% each year (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.

This shows that the company has improved itself over the last few years. Good news for shareholders. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions.

Has Costa Group Holdings Limited Been A Good Investment?

Most shareholders would probably be pleased with Costa Group Holdings Limited for providing a total return of 58% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

Harry Debney is paid around the same as most CEOs of similar size companies.

Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. Whatever your view on compensation, you might want to check if insiders are buying or selling Costa Group Holdings 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.