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Here's Why Shareholders May Want To Be Cautious With Increasing ikeGPS Group Limited's (NZSE:IKE) CEO Pay Packet

Key Insights

  • ikeGPS Group's Annual General Meeting to take place on 28th of September

  • Total pay for CEO Glenn Milnes includes NZ$1.02m salary

  • The overall pay is 187% above the industry average

  • Over the past three years, ikeGPS Group's EPS grew by 28% and over the past three years, the total loss to shareholders 28%

The underwhelming share price performance of ikeGPS Group Limited (NZSE:IKE) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 28th of September could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for ikeGPS Group

How Does Total Compensation For Glenn Milnes Compare With Other Companies In The Industry?

Our data indicates that ikeGPS Group Limited has a market capitalization of NZ$109m, and total annual CEO compensation was reported as NZ$1.3m for the year to March 2023. We note that's an increase of 18% above last year. Notably, the salary which is NZ$1.02m, represents most of the total compensation being paid.

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For comparison, other companies in the New Zealand Electronic industry with market capitalizations below NZ$335m, reported a median total CEO compensation of NZ$463k. This suggests that Glenn Milnes is paid more than the median for the industry. Furthermore, Glenn Milnes directly owns NZ$637k worth of shares in the company.

Component

2023

2022

Proportion (2023)

Salary

NZ$1.0m

NZ$836k

77%

Other

NZ$311k

NZ$287k

23%

Total Compensation

NZ$1.3m

NZ$1.1m

100%

Speaking on an industry level, nearly 73% of total compensation represents salary, while the remainder of 27% is other remuneration. ikeGPS Group is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
ceo-compensation

A Look at ikeGPS Group Limited's Growth Numbers

Over the past three years, ikeGPS Group Limited has seen its earnings per share (EPS) grow by 28% per year. It achieved revenue growth of 93% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has ikeGPS Group Limited Been A Good Investment?

Since shareholders would have lost about 28% over three years, some ikeGPS Group Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for ikeGPS Group that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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.