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Increases to Centuria Capital Group's (ASX:CNI) CEO Compensation Might Cool off for now

Key Insights

  • Centuria Capital Group's Annual General Meeting to take place on 17th of November

  • Total pay for CEO John McBain includes AU$1.55m salary

  • The total compensation is 153% higher than the average for the industry

  • Centuria Capital Group's three-year loss to shareholders was 40% while its EPS was down 5.2% over the past three years

Shareholders of Centuria Capital Group (ASX:CNI) will have been dismayed by the negative share price return over the last three years. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. Shareholders will have a chance to take their concerns to the board at the next AGM on 17th of November and vote on resolutions including executive compensation, which studies show may have an impact on company performance. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

Check out our latest analysis for Centuria Capital Group

How Does Total Compensation For John McBain Compare With Other Companies In The Industry?

At the time of writing, our data shows that Centuria Capital Group has a market capitalization of AU$990m, and reported total annual CEO compensation of AU$4.4m for the year to June 2023. That's slightly lower by 7.1% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$1.6m.

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On comparing similar companies from the Australian REITs industry with market caps ranging from AU$630m to AU$2.5b, we found that the median CEO total compensation was AU$1.7m. This suggests that John McBain is paid more than the median for the industry. Moreover, John McBain also holds AU$9.7m worth of Centuria Capital Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2023

2022

Proportion (2023)

Salary

AU$1.6m

AU$1.6m

35%

Other

AU$2.9m

AU$3.2m

65%

Total Compensation

AU$4.4m

AU$4.8m

100%

Speaking on an industry level, nearly 39% of total compensation represents salary, while the remainder of 61% is other remuneration. Centuria Capital Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

Centuria Capital Group's Growth

Over the last three years, Centuria Capital Group has shrunk its earnings per share by 5.2% per year. It achieved revenue growth of 23% over the last year.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Centuria Capital Group Been A Good Investment?

With a total shareholder return of -40% over three years, Centuria Capital Group shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. In the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan is in line with their expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Centuria Capital Group that investors should look into moving forward.

Switching gears from Centuria Capital Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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.