Yahoo Finance Shareholders Will Probably Hold Off On Increasing Growthpoint Properties Australia's (ASX:GOZ) CEO Compensation For The Time Being
Key Insights
Growthpoint Properties Australia to hold its Annual General Meeting on 15th of November
Salary of AU$1.12m is part of CEO Tim Collyer's total remuneration
The total compensation is similar to the average for the industry
Over the past three years, Growthpoint Properties Australia's FFO grew by 1.3% per year and over the past three years, the total loss to shareholders 28%
Shareholders of Growthpoint Properties Australia (ASX:GOZ) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 15th of November. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.
Check out our latest analysis for Growthpoint Properties Australia
How Does Total Compensation For Tim Collyer Compare With Other Companies In The Industry?
According to our data, Growthpoint Properties Australia has a market capitalization of AU$1.7b, and paid its CEO total annual compensation worth AU$2.6m over the year to June 2023. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$1.1m.
On examining similar-sized companies in the Australian REITs industry with market capitalizations between AU$625m and AU$2.5b, we discovered that the median CEO total compensation of that group was AU$2.0m. So it looks like Growthpoint Properties Australia compensates Tim Collyer in line with the median for the industry. What's more, Tim Collyer holds AU$3.6m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$1.1m | AU$1.1m | 43% |
Other | AU$1.5m | AU$1.6m | 57% |
Total Compensation | AU$2.6m | AU$2.6m | 100% |
On an industry level, roughly 39% of total compensation represents salary and 61% is other remuneration. According to our research, Growthpoint Properties Australia has allocated a higher percentage of pay to salary in comparison to the wider industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Growthpoint Properties Australia's Growth
Growthpoint Properties Australia has seen its funds from operations (FFO) increase by 1.3% per year over the past three years. In the last year, its revenue is up 9.6%.
We're not particularly impressed by the revenue growth, but the modest improvement in FFO is good. Considering these factors we'd say performance has been pretty decent, though not amazing. 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 Growthpoint Properties Australia Been A Good Investment?
With a three year total loss of 28% for the shareholders, Growthpoint Properties Australia would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At 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 will likely improve performance in the future.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which shouldn't be ignored) in Growthpoint Properties Australia we think you should know about.
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.
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.
