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Shareholders Will Most Likely Find Goodman Group's (ASX:GMG) CEO Compensation Acceptable

CEO Greg Goodman has done a decent job of delivering relatively good performance at Goodman Group (ASX:GMG) recently. As shareholders go into the upcoming AGM on 16 November 2022, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

View our latest analysis for Goodman Group

Comparing Goodman Group's CEO Compensation With The Industry

Our data indicates that Goodman Group has a market capitalization of AU$32b, and total annual CEO compensation was reported as AU$16m for the year to June 2022. That's a notable increase of 18% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$1.4m.

In comparison with other companies in the industry with market capitalizations over AU$12b, the reported median total CEO compensation was AU$15m. So it looks like Goodman Group compensates Greg Goodman in line with the median for the industry. What's more, Greg Goodman holds AU$265m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2022

2021

Proportion (2022)

Salary

AU$1.4m

AU$1.4m

9%

Other

AU$14m

AU$12m

91%

Total Compensation

AU$16m

AU$13m

100%

Talking in terms of the industry, salary represented approximately 40% of total compensation out of all the companies we analyzed, while other remuneration made up 60% of the pie. In Goodman Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

Goodman Group's Growth

Goodman Group's earnings per share (EPS) grew 26% per year over the last three years. Its revenue is up 30% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Goodman Group Been A Good Investment?

Goodman Group has generated a total shareholder return of 24% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

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, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for Goodman Group (1 is a bit concerning!) that you should be aware of before investing here.

Important note: Goodman 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.

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.

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