Yahoo Finance What Can We Conclude About Goodman Group's (ASX:GMG) CEO Pay?
Greg Goodman has been the CEO of Goodman Group (ASX:GMG) since 1998, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Goodman Group.
Note: The company does not report funds from operations, and as a result, we have used earnings per share in our analysis.
View our latest analysis for Goodman Group
Comparing Goodman Group's CEO Compensation With the industry
According to our data, Goodman Group has a market capitalization of AU$33b, and paid its CEO total annual compensation worth AU$12m over the year to June 2020. That's a slight decrease of 6.3% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$1.4m.
For comparison, other companies in the industry with market capitalizations above AU$11b, reported a median total CEO compensation of AU$11m. This suggests that Goodman Group remunerates its CEO largely in line with the industry average. Furthermore, Greg Goodman directly owns AU$2.3m worth of shares in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$1.4m | AU$1.4m | 12% |
Other | AU$11m | AU$11m | 88% |
Total Compensation | AU$12m | AU$13m | 100% |
On an industry level, roughly 44% of total compensation represents salary and 56% is other remuneration. In Goodman Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Goodman Group's Growth
Over the past three years, Goodman Group has seen its earnings per share (EPS) grow by 24% per year. In the last year, its revenue is down 7.4%.
This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Goodman Group Been A Good Investment?
Most shareholders would probably be pleased with Goodman Group for providing a total return of 138% over three years. 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.
To Conclude...
As we noted earlier, Goodman Group pays its CEO in line with similar-sized companies belonging to the same industry. Investors would surely be happy to see that returns have been great, and that EPS is up. So one could argue that CEO compensation is quite modest, if you consider company performance! Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Goodman Group that investors should be aware of in a dynamic business environment.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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. 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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