Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Luis Müller has been the CEO of Cohu, Inc. (NASDAQ:COHU) since 2014. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Luis Müller's Compensation Compare With Similar Sized Companies?
According to our data, Cohu, Inc. has a market capitalization of US$631m, and pays its CEO total annual compensation worth US$2.7m. (This number is for the twelve months until December 2018). That's less than last year. We think total compensation is more important but we note that the CEO salary is lower, at US$586k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.4m.
That means Luis Müller receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Cohu has changed from year to year.
Is Cohu, Inc. Growing?
Over the last three years Cohu, Inc. has shrunk its earnings per share by an average of 24% per year (measured with a line of best fit). In the last year, its revenue is up 38%.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. It could be important to check this free visual depiction of what analysts expect for the future.
Has Cohu, Inc. Been A Good Investment?
I think that the total shareholder return of 42%, over three years, would leave most Cohu, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Luis Müller is paid around the same as most CEOs of similar size companies.
While the growth could be better, the shareholder returns are clearly good. So all things considered I'd venture that the CEO pay is appropriate. Shareholders may want to check for free if Cohu insiders are buying or selling shares.
Important note: Cohu 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.
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.
If you spot an error that warrants correction, please contact the editor at email@example.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. Thank you for reading.