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How Much Is GDI Property Group's (ASX:GDI) CEO Getting Paid?

Simply Wall St
·4 mins read

This article will reflect on the compensation paid to Steve Gillard who has served as CEO of GDI Property Group (ASX:GDI) since 2013. This analysis will also look to assess whether the CEO is appropriately paid, considering recent funds from operations growth and investor returns for GDI Property Group.

Check out our latest analysis for GDI Property Group

Comparing GDI Property Group's CEO Compensation With the industry

Our data indicates that GDI Property Group has a market capitalization of AU$577m, and total annual CEO compensation was reported as AU$1.6m for the year to June 2020. That's a notable decrease of 13% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$740k.

On comparing similar companies from the same industry with market caps ranging from AU$280m to AU$1.1b, we found that the median CEO total compensation was AU$1.3m. From this we gather that Steve Gillard is paid around the median for CEOs in the industry. Furthermore, Steve Gillard directly owns AU$32m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2020

2019

Proportion (2020)

Salary

AU$740k

AU$740k

45%

Other

AU$900k

AU$1.2m

55%

Total Compensation

AU$1.6m

AU$1.9m

100%

Speaking on an industry level, nearly 48% of total compensation represents salary, while the remainder of 52% is other remuneration. Our data reveals that GDI Property Group allocates salary more or less in line with the wider market. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

A Look at GDI Property Group's Growth Numbers

GDI Property Group's funds from operations stayed pretty flat over the last three years. It saw its revenue drop 9.6% over the last year.

Its a bit disappointing to see that the company has failed to grow its FFO. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has GDI Property Group Been A Good Investment?

With a total shareholder return of 10% over three years, GDI Property Group shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

As we touched on above, GDI Property Group is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. GDI Property Group has had a poor showing when it comes to FFO growth, and it's tough to say that shareholder returns have done much to excite us. This doesn't compare well with CEO compensation, which is largely in line with the industry median. Considering all of this, we can't say the CEO is underpaid, and moving forward shareholders will likely want to see higher growth to justify any raise.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for GDI Property Group that investors should think about before committing capital to this stock.

Important note: GDI Property Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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@simplywallst.com.