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Here's Why We Think Guardian Capital Group Limited's (TSE:GCG.A) CEO Compensation Looks Fair for the time being

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Under the guidance of CEO George Mavroudis, Guardian Capital Group Limited (TSE:GCG.A) has performed reasonably well recently. As shareholders go into the upcoming AGM on 13 May 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.

See our latest analysis for Guardian Capital Group

How Does Total Compensation For George Mavroudis Compare With Other Companies In The Industry?

According to our data, Guardian Capital Group Limited has a market capitalization of CA$776m, and paid its CEO total annual compensation worth CA$2.7m over the year to December 2020. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$500k.

In comparison with other companies in the industry with market capitalizations ranging from CA$488m to CA$2.0b, the reported median CEO total compensation was CA$3.7m. From this we gather that George Mavroudis is paid around the median for CEOs in the industry. What's more, George Mavroudis holds CA$2.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2020

2019

Proportion (2020)

Salary

CA$500k

CA$500k

18%

Other

CA$2.2m

CA$2.2m

82%

Total Compensation

CA$2.7m

CA$2.7m

100%

Talking in terms of the industry, salary represented approximately 61% of total compensation out of all the companies we analyzed, while other remuneration made up 39% of the pie. In Guardian Capital Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

Guardian Capital Group Limited's Growth

Over the last three years, Guardian Capital Group Limited has shrunk its earnings per share by 22% per year. Its revenue is up 16% over the last year.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Guardian Capital Group Limited Been A Good Investment?

We think that the total shareholder return of 35%, over three years, would leave most Guardian Capital Group Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Some shareholders will be pleased by the relatively good results, however, the results could still be improved. Still, we think that until shareholders see an improvement in EPS growth, they may find it hard to justify a pay rise for the CEO.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which makes us a bit uncomfortable) in Guardian Capital Group we think you should know about.

Switching gears from Guardian Capital Group, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.