Yahoo Finance There Could Be A Chance Geneva Finance Limited's (NZSE:GFL) CEO Will Have Their Compensation Increased
The decent performance at Geneva Finance Limited (NZSE:GFL) recently will please most shareholders as they go into the AGM coming up on 15 September 2021. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. We have prepared some analysis below and we show why we think CEO compensation looks decent with even the possibility for a raise.
Check out our latest analysis for Geneva Finance
How Does Total Compensation For David O'Connell Compare With Other Companies In The Industry?
At the time of writing, our data shows that Geneva Finance Limited has a market capitalization of NZ$55m, and reported total annual CEO compensation of NZ$528k for the year to March 2021. That's slightly lower by 6.7% over the previous year. Notably, the salary of NZ$528k is the entirety of the CEO compensation.
For comparison, other companies in the industry with market capitalizations below NZ$282m, reported a median total CEO compensation of NZ$1.1m. Accordingly, Geneva Finance pays its CEO under the industry median. What's more, David O'Connell holds NZ$290k worth of shares in the company in their own name.
Component | 2021 | 2020 | Proportion (2021) |
Salary | NZ$528k | NZ$516k | 100% |
Other | - | NZ$50k | - |
Total Compensation | NZ$528k | NZ$566k | 100% |
On an industry level, roughly 37% of total compensation represents salary and 63% is other remuneration. On a company level, Geneva Finance prefers to reward its CEO through a salary, opting not to pay David O'Connell through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Geneva Finance Limited's Growth
Over the last three years, Geneva Finance Limited has not seen its earnings per share change much, though they have deteriorated slightly. Its revenue is up 21% over the last year.
The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Geneva Finance Limited Been A Good Investment?
We think that the total shareholder return of 52%, over three years, would leave most Geneva Finance Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
Geneva Finance rewards its CEO solely through a salary, ignoring non-salary benefits completely. Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 1 which doesn't sit too well with us) in Geneva Finance we think you should know about.
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.
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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