This article will reflect on the compensation paid to George Mavroudis who has served as CEO of Guardian Capital Group Limited (TSE:GCG.A) since 2011. This analysis will also assess whether Guardian Capital Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
See our latest analysis for Guardian Capital Group
How Does Total Compensation For George Mavroudis Compare With Other Companies In The Industry?
Our data indicates that Guardian Capital Group Limited has a market capitalization of CA$537m, and total annual CEO compensation was reported as CA$2.7m for the year to December 2019. That's a fairly small increase of 6.9% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$500k.
On comparing similar companies from the same industry with market caps ranging from CA$267m to CA$1.1b, we found that the median CEO total compensation was CA$3.6m. This suggests that Guardian Capital Group remunerates its CEO largely in line with the industry average. Moreover, George Mavroudis also holds CA$1.9m worth of Guardian Capital Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | CA$500k | CA$500k | 19% |
| Other | CA$2.2m | CA$2.0m | 81% |
| Total Compensation | CA$2.7m | CA$2.5m | 100% |
Speaking on an industry level, salary and non-salary portions, both make up 50% each of the total remuneration. It's interesting to note that Guardian Capital Group allocates a smaller portion of compensation to salary in comparison 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.
Guardian Capital Group Limited's Growth
Over the last three years, Guardian Capital Group Limited has shrunk its earnings per share by 35% per year. Its revenue is up 10.0% over the last year.
The decline in earnings is a bit concerning. The fairly low revenue growth fails to impress given that the earnings per share is down. 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 Guardian Capital Group Limited Been A Good Investment?
Since shareholders would have lost about 14% over three years, some Guardian Capital Group Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
As we noted earlier, Guardian Capital Group pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, earnings growth and shareholder returns have been in the red for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for Guardian Capital Group (1 can't be ignored!) that you should be aware of before investing here.
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.
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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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About TSX:GCG.A
Guardian Capital Group
Through its subsidiaries, primarily engages in the provision of investment services in Canada, the United States, the United Kingdom, and internationally.
Excellent balance sheet established dividend payer.
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