In 2016 Jamal Rushdy was appointed CEO of Collagen Solutions plc (LON:COS). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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 process should give us an idea about how appropriately the CEO is paid.
How Does Jamal Rushdy’s Compensation Compare With Similar Sized Companies?
Our data indicates that Collagen Solutions plc is worth UK£14m, and total annual CEO compensation is UK£233k. (This figure is for the year to March 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth UK£226k. We examined a group of similar sized companies, with market capitalizations of below UK£152m. The median CEO compensation in that group is UK£233k.
So Jamal Rushdy is paid around the average of 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.
The graphic below shows how CEO compensation at Collagen Solutions has changed from year to year.
Is Collagen Solutions plc Growing?
Collagen Solutions plc has reduced its earnings per share by an average of 4.1% a year, over the last three years (measured with a line of best fit). Its revenue is down -3.0% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Collagen Solutions plc Been A Good Investment?
With a three year total loss of 32%, Collagen Solutions plc would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
Jamal Rushdy is paid around the same as most CEOs of similar size companies.
The company isn’t growing EPS, and shareholder returns have been disappointing. Suffice it to say, we don’t think the CEO is underpaid! So you may want to check if insiders are buying Collagen Solutions shares with their own money (free access).
Important note: Collagen Solutions may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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