Does Goodman Group's (ASX:GMG) CEO Salary Compare Well With Others?
Greg Goodman became the CEO of Goodman Group (ASX:GMG) in 1998. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Goodman Group
How Does Greg Goodman's Compensation Compare With Similar Sized Companies?
According to our data, Goodman Group has a market capitalization of AU$26b, and paid its CEO total annual compensation worth AU$13m over the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$1.4m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We took a group of companies with market capitalizations over AU$12b, and calculated the median CEO total compensation to be AU$5.6m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
Thus we can conclude that Greg Goodman receives more in total compensation than the median of a group of large companies in the same market as Goodman Group. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Goodman Group has changed from year to year.
Is Goodman Group Growing?
Over the last three years Goodman Group has grown its earnings per share (EPS) by an average of 17% per year (using a line of best fit). Its revenue is up 14% over last year.
This demonstrates that the company has been improving recently. A good result. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. You might want to check this free visual report on analyst forecasts for future earnings.
Has Goodman Group Been A Good Investment?
Boasting a total shareholder return of 119% over three years, Goodman 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.
In Summary...
We examined the amount Goodman Group pays its CEO, and compared it to the amount paid by other large companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. So you may want to check if insiders are buying Goodman Group shares with their own money (free access).
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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.
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. Thank you for reading.
