Yahoo Finance Here's Why Shareholders May Want To Be Cautious With Increasing Goodman Group's (ASX:GMG) CEO Pay Packet
Performance at Goodman Group (ASX:GMG) has been reasonably good and CEO Greg Goodman has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 17 November 2021. However, some shareholders may still want to keep CEO compensation within reason.
View our latest analysis for Goodman Group
How Does Total Compensation For Greg Goodman Compare With Other Companies In The Industry?
Our data indicates that Goodman Group has a market capitalization of AU$44b, and total annual CEO compensation was reported as AU$13m for the year to June 2021. We note that's an increase of 12% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, 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$9.9m. This suggests that Greg Goodman is paid more than the median for the industry. Furthermore, Greg Goodman directly owns AU$920m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2021 | 2020 | Proportion (2021) |
Salary | AU$1.4m | AU$1.4m | 11% |
Other | AU$12m | AU$11m | 89% |
Total Compensation | AU$13m | AU$12m | 100% |
Talking in terms of the industry, salary represented approximately 45% of total compensation out of all the companies we analyzed, while other remuneration made up 55% of the pie. It's interesting to note that Goodman Group allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Goodman Group's Growth Numbers
Over the past three years, Goodman Group has seen its earnings per share (EPS) grow by 27% per year. It achieved revenue growth of 46% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Goodman Group Been A Good Investment?
We think that the total shareholder return of 145%, over three years, would leave most Goodman Group shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.
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.
Important note: Goodman Group 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.
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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