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How Should Investors React To Grand Banks Yachts Limited's (SGX:G50) CEO Pay?

Simply Wall St

Mark Richards became the CEO of Grand Banks Yachts Limited (SGX:G50) in 2014. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Grand Banks Yachts

How Does Mark Richards's Compensation Compare With Similar Sized Companies?

According to our data, Grand Banks Yachts Limited has a market capitalization of S$41m, and pays its CEO total annual compensation worth S$862k. (This is based on the year to June 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at S$662k. We looked at a group of companies with market capitalizations under S$276m, and the median CEO total compensation was S$129k.

As you can see, Mark Richards is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Grand Banks Yachts Limited is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Grand Banks Yachts, below.

SGX:G50 CEO Compensation, September 10th 2019

Is Grand Banks Yachts Limited Growing?

Grand Banks Yachts Limited has increased its earnings per share (EPS) by an average of 62% a year, over the last three years (using a line of best fit). It saw its revenue drop -4.7% over the last year.

This demonstrates that the company has been improving recently. A good result. Revenue growth is a real positive for growth, but ultimately profits are more important. Although we don't have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Grand Banks Yachts Limited Been A Good Investment?

With a three year total loss of 6.8%, Grand Banks Yachts Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared total CEO remuneration at Grand Banks Yachts Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. However, the returns to investors are far less impressive, over the same period. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling Grand Banks Yachts shares (free trial).

Important note: Grand Banks Yachts may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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.