Yahoo Finance Is Collagen Solutions plc's (LON:COS) CEO Being Overpaid?
Jamal Rushdy has been the CEO of Collagen Solutions plc (LON:COS) since 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for Collagen Solutions
How Does Jamal Rushdy's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Collagen Solutions plc has a market cap of UK£9.5m, and reported total annual CEO compensation of UK£244k for the year to March 2019. Notably, the salary of UK£236k is the vast majority of the CEO compensation. We examined a group of similar sized companies, with market capitalizations of below UK£160m. The median CEO total compensation in that group is UK£267k.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Collagen Solutions stands. Talking in terms of the sector, salary represented approximately 68% of total compensation out of all the companies we analysed, while other remuneration made up 32% of the pie. Collagen Solutions has gone down a largely traditional route, paying Jamal Rushdy a high salary, giving it preference as a compensation method to non-salary benefits.
So Jamal Rushdy receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance. The graphic below shows how CEO compensation at Collagen Solutions has changed from year to year.
Is Collagen Solutions plc Growing?
On average over the last three years, Collagen Solutions plc has seen earnings per share (EPS) move in a favourable direction by 23% each year (using a line of best fit). In the last year, its revenue is up 19%.
This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Collagen Solutions plc Been A Good Investment?
Since shareholders would have lost about 61% over three years, some Collagen Solutions plc shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
Jamal Rushdy is paid around the same as most CEOs of similar size companies.
We think that the EPS growth is very pleasing, but it's disappointing to see negative shareholder returns over three years. We'd be surprised if shareholders want to see a pay rise for the CEO, but we'd stop short of calling their pay too generous. On another note, Collagen Solutions has 5 warning signs (and 1 which is concerning) we think you should know about.
Important note: Collagen Solutions may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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.
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. Thank you for reading.
