Tim Collyer became the CEO of Growthpoint Properties Australia (ASX:GOZ) in 2010, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the funds from operations and shareholder returns of the company.
Comparing Growthpoint Properties Australia's CEO Compensation With the industry
Our data indicates that Growthpoint Properties Australia has a market capitalization of AU$2.7b, and total annual CEO compensation was reported as AU$2.0m for the year to June 2020. That's a slightly lower by 6.7% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$990k.
In comparison with other companies in the industry with market capitalizations ranging from AU$1.4b to AU$4.5b, the reported median CEO total compensation was AU$2.0m. From this we gather that Tim Collyer is paid around the median for CEOs in the industry. Moreover, Tim Collyer also holds AU$3.6m worth of Growthpoint Properties Australia stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 48% of total compensation represents salary and 52% is other remuneration. There isn't a significant difference between Growthpoint Properties Australia and the broader market, in terms of salary allocation in the overall compensation package. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Growthpoint Properties Australia's Growth Numbers
Over the past three years, Growthpoint Properties Australia has seen its funds from operations (FFO) grow by 5.9% per year. In the last year, its revenue is up 3.7%.
We'd prefer higher revenue growth, but we're happy with the modest FFO growth. So there are some positives here, but not enough to earn high praise. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Growthpoint Properties Australia Been A Good Investment?
Growthpoint Properties Australia has generated a total shareholder return of 27% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
As previously discussed, Tim is compensated close to the median for companies of its size, and which belong to the same industry. But the company has failed to produce substantial growth in either FFO or total shareholder return. We'd say that Tim is remunerated reasonably, but shareholders might be looking for better returns before they agree Tim deserves a raise.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 5 warning signs for Growthpoint Properties Australia you should be aware of, and 2 of them are potentially serious.
Switching gears from Growthpoint Properties Australia, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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