Yahoo Finance Most Shareholders Will Probably Find That The CEO Compensation For Great Portland Estates Plc (LON:GPOR) Is Reasonable
Despite Great Portland Estates Plc's (LON:GPOR) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 08 July 2021. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.
Check out our latest analysis for Great Portland Estates
How Does Total Compensation For Toby Courtauld Compare With Other Companies In The Industry?
Our data indicates that Great Portland Estates Plc has a market capitalization of UK£1.8b, and total annual CEO compensation was reported as UK£1.2m for the year to March 2021. Notably, that's a decrease of 24% over the year before. Notably, the salary which is UK£612.0k, represents a considerable chunk of the total compensation being paid.
On comparing similar companies from the same industry with market caps ranging from UK£1.4b to UK£4.6b, we found that the median CEO total compensation was UK£1.1m. So it looks like Great Portland Estates compensates Toby Courtauld in line with the median for the industry. Furthermore, Toby Courtauld directly owns UK£9.9m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2021 | 2020 | Proportion (2021) |
Salary | UK£612k | UK£603k | 50% |
Other | UK£601k | UK£996k | 50% |
Total Compensation | UK£1.2m | UK£1.6m | 100% |
On an industry level, around 45% of total compensation represents salary and 55% is other remuneration. It's interesting to note that Great Portland Estates pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Great Portland Estates Plc's Growth Numbers
Great Portland Estates Plc has reduced its earnings per share by 103% a year over the last three years. Its revenue is down 16% over the previous year.
Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. 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 Great Portland Estates Plc Been A Good Investment?
Great Portland Estates Plc has not done too badly by shareholders, with a total return of 8.5%, over three years. It would be nice to see that metric improve in the future. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.
To Conclude...
Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. Shareholders should make the most of the coming opportunity to question the board on key concerns they may 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. That's why we did some digging and identified 1 warning sign for Great Portland Estates that investors should think about before committing capital to this stock.
Important note: Great Portland Estates 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.
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