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We Think The Compensation For The Cooper Companies, Inc.'s (NYSE:COO) CEO Looks About Right

Key Insights

  • Cooper Companies' Annual General Meeting to take place on 15th of March

  • CEO Al White's total compensation includes salary of US$925.0k

  • The overall pay is comparable to the industry average

  • Cooper Companies' total shareholder return over the past three years was 20% while its EPS was down 6.2% over the past three years

Despite The Cooper Companies, Inc.'s (NYSE:COO) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 15th of March. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

See our latest analysis for Cooper Companies

Comparing The Cooper Companies, Inc.'s CEO Compensation With The Industry

Our data indicates that The Cooper Companies, Inc. has a market capitalization of US$17b, and total annual CEO compensation was reported as US$12m for the year to October 2022. That's just a smallish increase of 6.7% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$925k.

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For comparison, other companies in the American Medical Equipment industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$14m. So it looks like Cooper Companies compensates Al White in line with the median for the industry. Moreover, Al White also holds US$14m worth of Cooper Companies stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2022

2021

Proportion (2022)

Salary

US$925k

US$925k

8%

Other

US$11m

US$10m

92%

Total Compensation

US$12m

US$11m

100%

On an industry level, roughly 20% of total compensation represents salary and 80% is other remuneration. It's interesting to note that Cooper Companies allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

The Cooper Companies, Inc.'s Growth

Over the last three years, The Cooper Companies, Inc. has shrunk its earnings per share by 6.2% per year. It achieved revenue growth of 12% over the last year.

The decline in EPS is a bit concerning. 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 EPS has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has The Cooper Companies, Inc. Been A Good Investment?

The Cooper Companies, Inc. has generated a total shareholder return of 20% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Cooper Companies that you should be aware of before investing.

Important note: Cooper Companies 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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

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