We believe that some shareholders may be reluctant to increase the compensation of the CEO of Cogstate Limited (ASX: CGS)

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CEO Brad O’Connor has done a decent job of delivering relatively good performance to Cogstate Limited (ASX: CGS) recently. This is something shareholders will keep in mind when voting on company resolutions such as executive compensation at the next general meeting on October 27, 2021. However, some shareholders will still be wary of paying. the CEO excessively.

See our latest review for Cogstate

Cogstate Limited CEO Compensation Comparison with Industry

According to our data, Cogstate Limited has a market capitalization of AU $ 387 million and paid its CEO a total annual compensation of US $ 1.1 million in the year until June 2021. This is a notable increase of 16% compared to last year. We think total compensation is more important, but our data shows the CEO salary is less, at US $ 344,000.

By comparison, other companies in the same industry with market capitalizations between A $ 134 million and A $ 535 million had a median total CEO compensation of US $ 474,000. Therefore, we can conclude that Brad O’Connor is paid better than the industry median. In addition, Brad O’Connor also owns Cogstate shares worth AU $ 9.8 million directly under their own name, which tells us that they have a significant personal stake in the company.

Making up

2021

2020

Proportion (2021)

Salary

US $ 344,000

US $ 371,000

32%

Other

US $ 732,000

US $ 559,000

68%

Total compensation

US $ 1.1 million

US $ 931,000

100%

At the industry level, almost 57% of total compensation is salary, while the remainder 43% is other compensation. Cogstate sets aside a smaller share of salary compensation, compared to the industry as a whole. If non-salary compensation dominates total salary, it is an indicator that the executive salary is linked to the performance of the company.

CEO-compensation

Growth of Cogstate Limited

Over the past three years, Cogstate Limited has seen its earnings per share (EPS) increase by 70% per year. Last year, its turnover increased by 44%.

Shareholders would be happy to know that the company has improved over the past few years. The combination of strong revenue growth and improving EPS over the medium term is certainly indicative of the kind of growth we like to see. Going forward, you might want to check out this free visual report at analyst forecasts for the future profits of the company.

Has Cogstate Limited been a good investment?

With a total shareholder return of 277% over three years, Cogstate Limited has performed well by shareholders. This strong performance could mean that some shareholders would not object to the CEO being paid more than is normal for a company of its size.

To conclude…

Seeing that the company has performed decently, only a few shareholders, if any, might have questions about CEO compensation at the next AGM. However, if the board proposes to increase compensation, some shareholders might have questions given that the CEO is already paid more than the industry.

CEO compensation is a crucial aspect to watch, but investors should also keep their eyes open for other issues related to company performance. That’s why we dug and identified 3 warning signs for Cogstate what investors should think about before committing capital to this stock.

Arguably, the quality of the company is much more important than the compensation levels of CEOs. So look at this free list of interesting companies that have a HIGH return on equity and low leverage.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in the mentioned stocks.

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