Does Cohen's (NYSEMKT:COHN) CEO Salary Compare Well With The Performance Of The Company?

Lester Brafman became the CEO of Cohen & Company Inc. (NYSEMKT:COHN) in 2013, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Cohen.

See our latest analysis for Cohen

Comparing Cohen & Company Inc.'s CEO Compensation With the industry

Our data indicates that Cohen & Company Inc. has a market capitalization of US$67m, and total annual CEO compensation was reported as US$903k for the year to December 2019. Notably, that's a decrease of 30% over the year before. We note that the salary portion, which stands at US$630.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$400k. Accordingly, our analysis reveals that Cohen & Company Inc. pays Lester Brafman north of the industry median. Moreover, Lester Brafman also holds US$5.2m worth of Cohen stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 14% of total compensation represents salary and 86% is other remuneration. Cohen pays out 70% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Cohen & Company Inc.'s Growth

Over the last three years, Cohen & Company Inc. has shrunk its earnings per share by 32% per year. In the last year, its revenue is up 68%.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Cohen & Company Inc. Been A Good Investment?

Most shareholders would probably be pleased with Cohen & Company Inc. for providing a total return of 151% 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, Cohen pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But Cohen is growing its revenue, and total shareholder returns have also been pleasing for the last three years. The only sore spot is EPS growth, which is negative over the same period. Although we would have liked to see EPS growth, positive shareholder returns, and growing revenues make us believe CEO compensation is reasonable.

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 5 warning signs for Cohen (of which 2 make us uncomfortable!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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