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Jamal Rushdy became the CEO of Collagen Solutions plc (LON:COS) in 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. 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£17m, and total annual CEO compensation is UK£233k. (This number is for the twelve months until March 2018). Notably, the salary of UK£226k is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations under UK£160m, and the median CEO total compensation was UK£254k.
That means Jamal Rushdy receives fairly typical remuneration for the CEO of a company that size. 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?
Over the last three years Collagen Solutions plc has grown its earnings per share (EPS) by an average of 7.8% per year (using a line of best fit). In the last year, its revenue is up 18%.
I would argue that the modest growth in revenue is a notable positive. And the modest growth in earnings per share isn’t bad, either. So while we’d stop just short of calling this a top performer, but we think it is well worth watching.
Has Collagen Solutions plc Been A Good Investment?
Since shareholders would have lost about 54% over three years, some Collagen Solutions plc shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
Remuneration for Jamal Rushdy is close enough to the median pay for a CEO of a similar sized company .
We would like to see somewhat stronger per share growth. And it’s hard to argue that the returns over the last three years have delighted. So suffice it to say we don’t think the compensation is modest. So you may want to check if insiders are buying Collagen Solutions shares with their own money (free access).
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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If you spot an error that warrants correction, please contact the editor at email@example.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.