This article will reflect on the compensation paid to Robert Bulluss who has served as CEO of Coventry Group Ltd (ASX:CYG) since 2017. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Coventry Group

Comparing Coventry Group Ltd's CEO Compensation With the industry

At the time of writing, our data shows that Coventry Group Ltd has a market capitalization of AU$70m, and reported total annual CEO compensation of AU$571k for the year to June 2020. That's a notable increase of 28% on last year. In particular, the salary of AU$399.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below AU$277m, we found that the median total CEO compensation was AU$570k. From this we gather that Robert Bulluss is paid around the median for CEOs in the industry. What's more, Robert Bulluss holds AU$265k worth of shares in the company in their own name.

On an industry level, roughly 63% of total compensation represents salary and 37% is other remuneration. According to our research, Coventry Group has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Coventry Group Ltd's Growth

Coventry Group Ltd has seen its earnings per share (EPS) increase by 116% a year over the past three years. Its revenue is up 22% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Coventry Group Ltd Been A Good Investment?

With a three year total loss of 13% for the shareholders, Coventry Group Ltd would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we touched on above, Coventry Group Ltd is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. At the same time, the company has logged negative shareholder returns over the last three years. But on the bright side, EPS growth is positive over the same period. Considering positive EPS growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.