Shareholders May Be More Conservative With Grit Real Estate Income Group Limited's (LON:GR1T) CEO Compensation For Now
Key Insights
Grit Real Estate Income Group to hold its Annual General Meeting on 18th of December
Total pay for CEO Bronwyn Knight includes US$538.0k salary
Total compensation is 222% above industry average
Over the past three years, Grit Real Estate Income Group's EPS grew by 78% and over the past three years, the total loss to shareholders 56%
The underwhelming share price performance of Grit Real Estate Income Group Limited (LON:GR1T) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 18th of December could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
Check out our latest analysis for Grit Real Estate Income Group
Comparing Grit Real Estate Income Group Limited's CEO Compensation With The Industry
At the time of writing, our data shows that Grit Real Estate Income Group Limited has a market capitalization of UK£83m, and reported total annual CEO compensation of US$1.6m for the year to June 2023. That's a slight decrease of 7.1% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$538k.
On comparing similar-sized companies in the British Real Estate industry with market capitalizations below UK£159m, we found that the median total CEO compensation was US$502k. Hence, we can conclude that Bronwyn Knight is remunerated higher than the industry median. Furthermore, Bronwyn Knight directly owns UK£2.4m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$538k | US$498k | 33% |
Other | US$1.1m | US$1.2m | 67% |
Total Compensation | US$1.6m | US$1.7m | 100% |
Speaking on an industry level, nearly 64% of total compensation represents salary, while the remainder of 36% is other remuneration. Grit Real Estate Income Group pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Grit Real Estate Income Group Limited's Growth
Over the past three years, Grit Real Estate Income Group Limited has seen its earnings per share (EPS) grow by 78% per year. It saw its revenue drop 2.8% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Grit Real Estate Income Group Limited Been A Good Investment?
The return of -56% over three years would not have pleased Grit Real Estate Income Group Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Grit Real Estate Income Group that investors should be aware of in a dynamic business environment.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
