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Is GR Engineering Services Limited's (ASX:GNG) CEO Paid At A Competitive Rate?

Simply Wall St

In 2013 Geoff Jones was appointed CEO of GR Engineering Services Limited (ASX:GNG). 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. 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.

See our latest analysis for GR Engineering Services

How Does Geoff Jones's Compensation Compare With Similar Sized Companies?

According to our data, GR Engineering Services Limited has a market capitalization of AU$121m, and paid its CEO total annual compensation worth AU$713k over the year to June 2019. That's actually a decrease on the year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$579k. We took a group of companies with market capitalizations below AU$290m, and calculated the median CEO total compensation to be AU$378k.

As you can see, Geoff Jones is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean GR Engineering Services Limited is paying too much. 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 GR Engineering Services has changed from year to year.

ASX:GNG CEO Compensation, November 1st 2019

Is GR Engineering Services Limited Growing?

On average over the last three years, GR Engineering Services Limited has shrunk earnings per share by 36% each year (measured with a line of best fit). In the last year, its revenue is down 36%.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has GR Engineering Services Limited Been A Good Investment?

Given the total loss of 44% over three years, many shareholders in GR Engineering Services Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We examined the amount GR Engineering Services 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.

Earnings per share have not grown in three years, and the revenue growth fails to impress us. Over the same period, investors would have come away with nothing in the way of share price gains. In our opinion the CEO might be paid too generously! So you may want to check if insiders are buying GR Engineering Services shares with their own money (free access).

If you want to buy a stock that is better than GR Engineering Services, 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.