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Bob Johnston became the CEO of GPT Group (ASX:GPT) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Bob Johnston’s Compensation Compare With Similar Sized Companies?
According to our data, GPT Group has a market capitalization of AU$11b, and pays its CEO total annual compensation worth AU$3.9m. (This figure is for the year to 2018). That’s a modest increase of 3.8% on the prior year year. We think total compensation is more important but we note that the CEO salary is lower, at AU$1.5m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of AU$5.6b to AU$17b. The median total CEO compensation was AU$4.1m.
So Bob Johnston receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at GPT Group has changed from year to year.
Is GPT Group Growing?
Over the last three years GPT Group has grown its earnings per share (EPS) by an average of 13% per year (using a line of best fit). It achieved revenue growth of 4.9% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.
Has GPT Group Been A Good Investment?
Boasting a total shareholder return of 36% over three years, GPT Group has done well by shareholders. 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.
Bob Johnston is paid around the same as most CEOs of similar size companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Indeed, many might consider the pay rather modest, given the solid company performance! Shareholders may want to check for free if GPT Group insiders are buying or selling shares.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. On rare occasion, data errors may occur. Thank you for reading.