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Is Gale Pacific Limited's (ASX:GAP) CEO Paid Enough Relative To Peers?

Simply Wall St

In 2014 Nick Pritchard was appointed CEO of Gale Pacific Limited (ASX:GAP). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Gale Pacific

How Does Nick Pritchard's Compensation Compare With Similar Sized Companies?

Our data indicates that Gale Pacific Limited is worth AU$93m, and total annual CEO compensation is AU$693k. (This number is for the twelve months until June 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$492k. We took a group of companies with market capitalizations below AU$291m, and calculated the median CEO total compensation to be AU$356k.

As you can see, Nick Pritchard is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Gale Pacific Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at Gale Pacific has changed over time.

ASX:GAP CEO Compensation, July 31st 2019

Is Gale Pacific Limited Growing?

Over the last three years Gale Pacific Limited has shrunk its earnings per share by an average of 21% per year (measured with a line of best fit). It achieved revenue growth of 4.6% over the last year.

Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.

Has Gale Pacific Limited Been A Good Investment?

With a total shareholder return of 4.7% over three years, Gale Pacific Limited has done okay by shareholders. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

We examined the amount Gale Pacific Limited pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

We think many shareholders would be underwhelmed with the business growth over the last three years.

And shareholder returns are decent but not great. So we think more research is needed, but we don't think the CEO underpaid. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Gale Pacific.

If you want to buy a stock that is better than Gale Pacific, this free list of high return, low debt companies is a great place to look.

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 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. Thank you for reading.