Increases to Genesis Land Development Corp.'s (TSE:GDC) CEO Compensation Might Cool off for now

In the past three years, shareholders of Genesis Land Development Corp. (TSE:GDC) have seen a loss on their investment. Per share earnings growth is also poor, despite revenues growing. The AGM coming up on 14 May 2021 will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

Check out our latest analysis for Genesis Land Development

Comparing Genesis Land Development Corp.'s CEO Compensation With the industry

According to our data, Genesis Land Development Corp. has a market capitalization of CA$115m, and paid its CEO total annual compensation worth CA$673k over the year to December 2020. That's a notable increase of 11% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$305k.

In comparison with other companies in the industry with market capitalizations under CA$243m, the reported median total CEO compensation was CA$214k. Accordingly, our analysis reveals that Genesis Land Development Corp. pays Iain Stewart north of the industry median. Moreover, Iain Stewart also holds CA$284k worth of Genesis Land Development stock directly under their own name.

On an industry level, roughly 54% of total compensation represents salary and 46% is other remuneration. Genesis Land Development pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Genesis Land Development Corp.'s Growth

Over the last three years, Genesis Land Development Corp. has shrunk its earnings per share by 19% per year. It achieved revenue growth of 25% over the last year.

The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. 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. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Genesis Land Development Corp. Been A Good Investment?

Since shareholders would have lost about 13% over three years, some Genesis Land Development Corp. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. In 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 is in line with their 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 is a bit unpleasant) in Genesis Land Development we think you should know about.

Important note: Genesis Land Development 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.

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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