Jim Coleman has been the CEO of Cokal Limited (ASX:CKA) since 2018, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Cokal pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
See our latest analysis for Cokal
Comparing Cokal Limited's CEO Compensation With the industry
At the time of writing, our data shows that Cokal Limited has a market capitalization of AU$78m, and reported total annual CEO compensation of US$187k for the year to June 2020. We note that's a decrease of 25% compared to last year. In particular, the salary of US$131.5k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the industry with market capitalizations below AU$259m, we found that the median total CEO compensation was US$237k. This suggests that Cokal remunerates its CEO largely in line with the industry average. What's more, Jim Coleman holds AU$380k worth of shares in the company in their own name.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | US$131k | US$165k | 70% |
| Other | US$56k | US$84k | 30% |
| Total Compensation | US$187k | US$249k | 100% |
On an industry level, around 69% of total compensation represents salary and 31% is other remuneration. Our data reveals that Cokal allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Cokal Limited's Growth
Cokal Limited's earnings per share (EPS) grew 74% per year over the last three years. It achieved revenue growth of 83% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Cokal Limited Been A Good Investment?
Most shareholders would probably be pleased with Cokal Limited for providing a total return of 71% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
As we noted earlier, Cokal pays its CEO in line with similar-sized companies belonging to the same industry. The company is growing EPS and total shareholder returns have been pleasing. Indeed, many might consider that Jim is compensated rather modestly, given the solid company performance! Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.
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 Cokal (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.
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.
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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.
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About ASX:CKA
Cokal
Engages in the identification and development of coal in Indonesia.
Moderate and slightly overvalued.
