Yahoo Finance Should Shareholders Reconsider GTN Limited's (ASX:GTN) CEO Compensation Package?
GTN Limited (ASX:GTN) has not performed well recently and CEO Bill Yde will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 11 November 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.
Check out our latest analysis for GTN
How Does Total Compensation For Bill Yde Compare With Other Companies In The Industry?
Our data indicates that GTN Limited has a market capitalization of AU$114m, and total annual CEO compensation was reported as AU$1.8m for the year to June 2021. That's a notable increase of 11% on last year. We note that the salary of AU$1.10m makes up a sizeable portion of the total compensation received by the CEO.
On comparing similar-sized companies in the industry with market capitalizations below AU$269m, we found that the median total CEO compensation was AU$832k. This suggests that Bill Yde is paid more than the median for the industry. Moreover, Bill Yde also holds AU$1.5m worth of GTN stock directly under their own name.
Component | 2021 | 2020 | Proportion (2021) |
Salary | AU$1.1m | AU$1.2m | 60% |
Other | AU$746k | AU$500k | 40% |
Total Compensation | AU$1.8m | AU$1.7m | 100% |
On an industry level, around 60% of total compensation represents salary and 40% is other remuneration. Our data reveals that GTN allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
GTN Limited's Growth
GTN Limited has reduced its earnings per share by 99% a year over the last three years. Its revenue is down 11% over the previous year.
The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 GTN Limited Been A Good Investment?
The return of -73% over three years would not have pleased GTN Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for GTN that investors should be aware of in a dynamic business environment.
Important note: GTN 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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