Should You Worry About Coffee Holding Co., Inc.’s (NASDAQ:JVA) CEO Pay Cheque?

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

Andy Gordon became the CEO of Coffee Holding Co., Inc. (NASDAQ:JVA) in 1997. 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. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Coffee Holding

How Does Andy Gordon’s Compensation Compare With Similar Sized Companies?

Our data indicates that Coffee Holding Co., Inc. is worth US$23m, and total annual CEO compensation is US$387k. (This is based on the year to October 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$357k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$452k.

So Andy Gordon is paid around the average of the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.

You can see a visual representation of the CEO compensation at Coffee Holding, below.

NasdaqCM:JVA CEO Compensation, June 12th 2019
NasdaqCM:JVA CEO Compensation, June 12th 2019

Is Coffee Holding Co., Inc. Growing?

On average over the last three years, Coffee Holding Co., Inc. has shrunk earnings per share by 6.9% each year (measured with a line of best fit). It achieved revenue growth of 16% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. There’s no doubt that the silver lining is that revenue is up. But it isn’t sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. 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 Coffee Holding Co., Inc. Been A Good Investment?

With a three year total loss of 16%, Coffee Holding Co., Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

Remuneration for Andy Gordon is close enough to the median pay for a CEO of a similar sized company .

Returns have been disappointing and the company is not growing its earnings per share. Suffice it to say, we don’t think the CEO is underpaid! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Coffee Holding.

If you want to buy a stock that is better than Coffee Holding, this free list of high return, low debt companies is a great place to look.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.