Ellen Cotter became the CEO of Reading International, Inc. (NASDAQ:RDI) in 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Ellen Cotter’s Compensation Compare With Similar Sized Companies?
According to our data, Reading International, Inc. has a market capitalization of US$265m, and paid its CEO total annual compensation worth US$1.3m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$496k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from US$100m to US$400m, and discovered that the median CEO total compensation of that group was US$1.1m.
That means Ellen Cotter receives fairly typical remuneration for the CEO of a company that size. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see a visual representation of the CEO compensation at Reading International, below.
Is Reading International, Inc. Growing?
Reading International, Inc. has reduced its earnings per share by an average of 16% a year, over the last three years (measured with a line of best fit). Its revenue is down 7.6% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. 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 Reading International, Inc. Been A Good Investment?
Since shareholders would have lost about 34% over three years, some Reading International, Inc. shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
Ellen Cotter 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 Reading International 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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