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Is Grand City Properties S.A.'s (ETR:GYC) CEO Pay Justified?

Simply Wall St

Christian Windfuhr has been the CEO of Grand City Properties S.A. (ETR:GYC) since 2013. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. 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.

View our latest analysis for Grand City Properties

How Does Christian Windfuhr's Compensation Compare With Similar Sized Companies?

Our data indicates that Grand City Properties S.A. is worth €3.6b, and total annual CEO compensation was reported as €546k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at €192k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from €1.8b to €5.8b, and the median CEO total compensation was €2.4m.

A first glance this seems like a real positive for shareholders, since Christian Windfuhr is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business.

You can see a visual representation of the CEO compensation at Grand City Properties, below.

XTRA:GYC CEO Compensation, November 15th 2019

Is Grand City Properties S.A. Growing?

Grand City Properties S.A. has reduced its earnings per share by an average of 4.3% a year, over the last three years (measured with a line of best fit). Its revenue is up 5.6% over last year.

Sadly for shareholders, earnings per share are actually down, over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. 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 Grand City Properties S.A. Been A Good Investment?

I think that the total shareholder return of 58%, over three years, would leave most Grand City Properties S.A. shareholders smiling. 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.

In Summary...

It looks like Grand City Properties S.A. pays its CEO less than similar sized companies.

It's well worth noting that while Christian Windfuhr is paid less than most company leaders (at similar sized companies), there isn't much EPS growth. Having said that, returns to shareholders have been great. So, while it would be nice to have EPS growth, on our analysis the CEO compensation is not an issue. So you may want to check if insiders are buying Grand City Properties 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.

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.