Yahoo Finance How Much Is Good Spirits Hospitality Limited (NZSE:GSH) Paying Its CEO?
Geoff Tuttle has been the CEO of Good Spirits Hospitality Limited (NZSE:GSH) since 2018, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for Good Spirits Hospitality
How Does Total Compensation For Geoff Tuttle Compare With Other Companies In The Industry?
At the time of writing, our data shows that Good Spirits Hospitality Limited has a market capitalization of NZ$4.4m, and reported total annual CEO compensation of NZ$380k for the year to June 2020. Notably, that's a decrease of 10% over the year before. Notably, the salary which is NZ$350.0k, represents most of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below NZ$279m, we found that the median total CEO compensation was NZ$566k. This suggests that Geoff Tuttle is paid below the industry median. Moreover, Geoff Tuttle also holds NZ$91k worth of Good Spirits Hospitality stock directly under their own name.
Component | 2020 | 2019 | Proportion (2020) |
Salary | NZ$350k | NZ$300k | 92% |
Other | NZ$30k | NZ$123k | 8% |
Total Compensation | NZ$380k | NZ$423k | 100% |
On an industry level, roughly 78% of total compensation represents salary and 22% is other remuneration. Good Spirits Hospitality pays out 92% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Good Spirits Hospitality Limited's Growth Numbers
Over the last three years, Good Spirits Hospitality Limited has shrunk its earnings per share by 129% per year. Its revenue is down 7.7% over the previous year.
Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Good Spirits Hospitality Limited Been A Good Investment?
Most shareholders would probably be pleased with Good Spirits Hospitality Limited for providing a total return of 43% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
To Conclude...
As we touched on above, Good Spirits Hospitality Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. And while EPS growth is negative, shareholder returns have been healthy recently. So, while it would be nice to have better EPS growth, our analysis suggests CEO compensation is quite modest.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 3 which don't sit too well with us) in Good Spirits Hospitality we think you should know about.
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.
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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