Stock Analysis

Shareholders Will Probably Hold Off On Increasing Coherent Corp.'s (NASDAQ:COHR) CEO Compensation For The Time Being

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NasdaqGS:COHR
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Under the guidance of CEO Chuck Mattera, Coherent Corp. (NASDAQ:COHR) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 16 November 2022. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out the opportunities and risks within the US Electronic industry.

How Does Total Compensation For Chuck Mattera Compare With Other Companies In The Industry?

At the time of writing, our data shows that Coherent Corp. has a market capitalization of US$4.5b, and reported total annual CEO compensation of US$11m for the year to June 2022. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$980k.

In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$7.9m. This suggests that Chuck Mattera is paid more than the median for the industry. Furthermore, Chuck Mattera directly owns US$18m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20222021Proportion (2022)
Salary US$980k US$951k 9%
Other US$9.7m US$9.5m 91%
Total CompensationUS$11m US$10m100%

On an industry level, around 30% of total compensation represents salary and 70% is other remuneration. In Coherent's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
NasdaqGS:COHR CEO Compensation November 10th 2022

A Look at Coherent Corp.'s Growth Numbers

Coherent Corp.'s earnings per share (EPS) grew 12% per year over the last three years. It achieved revenue growth of 6.8% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Coherent Corp. Been A Good Investment?

With a total shareholder return of 5.6% over three years, Coherent Corp. has done okay by shareholders, but there's always room for improvement. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for Coherent that investors should be aware of in a dynamic business environment.

Important note: Coherent is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

Valuation is complex, but we're helping make it simple.

Find out whether Coherent is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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