John Hoedemaker became the CEO of Gage Roads Brewing Co. Limited (ASX:GRB) in 2011. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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 process should give us an idea about how appropriately the CEO is paid.
How Does John Hoedemaker's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Gage Roads Brewing Co. Limited has a market cap of AU$67m, and reported total annual CEO compensation of AU$476k for the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$390k. We took a group of companies with market capitalizations below AU$315m, and calculated the median CEO total compensation to be AU$389k.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Gage Roads Brewing stands. On an industry level, roughly 64% of total compensation represents salary and 36% is other remuneration. Our data reveals that Gage Roads Brewing allocates salary in line with the wider market.
That means John Hoedemaker receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context. You can see, below, how CEO compensation at Gage Roads Brewing has changed over time.
Is Gage Roads Brewing Co. Limited Growing?
Gage Roads Brewing Co. Limited has reduced its earnings per share by an average of 8.1% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 13% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has Gage Roads Brewing Co. Limited Been A Good Investment?
Most shareholders would probably be pleased with Gage Roads Brewing Co. Limited for providing a total return of 49% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
John Hoedemaker is paid around the same as most CEOs of similar size companies.
We feel that earnings per share have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So we can't see a reason to suggest the pay is inappropriate. CEO compensation is an important area to keep your eyes on, but we've also identified 5 warning signs for Gage Roads Brewing (1 doesn't sit too well with us!) that you should be aware of before investing here.
Important note: Gage Roads Brewing may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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.
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