In 2010 Donald McGurk was appointed CEO of Codan Limited (ASX:CDA). 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Donald McGurk’s Compensation Compare With Similar Sized Companies?
According to our data, Codan Limited has a market capitalization of AU$920m, and paid its CEO total annual compensation worth AU$1.1m over the year to June 2018. While we always look at total compensation first, we note that the salary component is less, at AU$528k. We looked at a group of companies with market capitalizations from AU$591m to AU$2.4b, and the median CEO total compensation was AU$1.5m.
So Donald McGurk receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance. It could be important to check this free visual depiction of what analysts expect for the future.
You can see, below, how CEO compensation at Codan has changed over time.
Is Codan Limited Growing?
On average over the last three years, Codan Limited has grown earnings per share (EPS) by 22% each year (using a line of best fit). In the last year, its revenue is up 18%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business.
Has Codan Limited Been A Good Investment?
Boasting a total shareholder return of 289% over three years, Codan Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Remuneration for Donald McGurk is close enough to the median pay for a CEO of a similar sized company .
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Indeed, many might consider the pay rather modest, given the solid company performance! Shareholders may want to check for free if Codan insiders are buying or selling shares.
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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