Shareholders will probably not be too impressed with the underwhelming results at G8 Education Limited (ASX:GEM) recently. At the upcoming AGM on 19 May 2021, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for G8 Education

How Does Total Compensation For Gary Carroll Compare With Other Companies In The Industry?

At the time of writing, our data shows that G8 Education Limited has a market capitalization of AU$856m, and reported total annual CEO compensation of AU$831k for the year to December 2020. We note that's an increase of 9.0% above last year. Notably, the salary which is AU$736.5k, represents most of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from AU$510m to AU$2.0b, we found that the median CEO total compensation was AU$1.1m. From this we gather that Gary Carroll is paid around the median for CEOs in the industry. What's more, Gary Carroll holds AU$173k worth of shares in the company in their own name.

On an industry level, around 82% of total compensation represents salary and 18% is other remuneration. Our data reveals that G8 Education allocates salary more or less in line with the wider market. 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.

G8 Education Limited's Growth

Over the last three years, G8 Education Limited has shrunk its earnings per share by 97% per year. It saw its revenue drop 15% over the last 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. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has G8 Education Limited Been A Good Investment?

The return of -53% over three years would not have pleased G8 Education Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

Whatever your view on compensation, you might want to check if insiders are buying or selling G8 Education shares (free trial).

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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