We Think Some Shareholders May Hesitate To Increase GUD Holdings Limited's (ASX:GUD) CEO Compensation

Simply Wall St
·3 min read

CEO Graeme Whickman has done a decent job of delivering relatively good performance at GUD Holdings Limited (ASX:GUD) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 28 October 2021. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for GUD Holdings

How Does Total Compensation For Graeme Whickman Compare With Other Companies In The Industry?

According to our data, GUD Holdings Limited has a market capitalization of AU$1.1b, and paid its CEO total annual compensation worth AU$1.8m over the year to June 2021. We note that's an increase of 49% above last year. In particular, the salary of AU$963.5k, makes up a fairly large portion of the total compensation being paid to the CEO.

On comparing similar companies from the same industry with market caps ranging from AU$534m to AU$2.1b, we found that the median CEO total compensation was AU$783k. Hence, we can conclude that Graeme Whickman is remunerated higher than the industry median. Furthermore, Graeme Whickman directly owns AU$306k worth of shares in the company.

Component

2021

2020

Proportion (2021)

Salary

AU$963k

AU$953k

53%

Other

AU$840k

AU$256k

47%

Total Compensation

AU$1.8m

AU$1.2m

100%

Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. GUD Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
ceo-compensation

A Look at GUD Holdings Limited's Growth Numbers

Over the past three years, GUD Holdings Limited has seen its earnings per share (EPS) grow by 3.1% per year. Its revenue is up 27% over the last year.

It's hard to interpret the strong revenue growth as anything other than a positive. Combined with modest EPS growth, we get a good impression of the company. So while we'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has GUD Holdings Limited Been A Good Investment?

GUD Holdings Limited has generated a total shareholder return of 4.0% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 3 warning signs for GUD Holdings that investors should look into moving forward.

Switching gears from GUD Holdings, 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. 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.

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

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