It's Unlikely That GUD Holdings Limited's (ASX:GUD) CEO Will See A Huge Pay Rise This Year

Under the guidance of CEO Graeme Whickman, GUD Holdings Limited (ASX:GUD) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 28 October 2021. However, some shareholders may still want to keep CEO compensation within reason.

Check out our latest analysis for GUD Holdings

How Does Total Compensation For Graeme Whickman Compare With Other Companies In The Industry?

Our data indicates that GUD Holdings Limited has a market capitalization of AU$1.1b, and total annual CEO compensation was reported as AU$1.8m for the year to June 2021. Notably, that's an increase of 49% over the year before. Notably, the salary which is AU$963.5k, represents a considerable chunk of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between AU$534m and AU$2.1b, we discovered that the median CEO total compensation of that group was AU$783k. Hence, we can conclude that Graeme Whickman is remunerated higher than the industry median. What's more, Graeme Whickman holds AU$306k worth of shares in the company in their own name.

Component	2021	2020	Proportion (2021)
Salary	AU$963k	AU$953k	53%
Other	AU$840k	AU$256k	47%
Total Compensation	AU$1.8m	AU$1.2m	100%

On an industry level, roughly 77% of total compensation represents salary and 23% is other remuneration. GUD Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at GUD Holdings Limited's Growth Numbers

Over the past three years, GUD Holdings Limited has seen its earnings per share (EPS) grow by 3.1% per year. It achieved revenue growth of 27% over the last year.

It's hard to interpret the strong revenue growth as anything other than a positive. Combined with modest EPS growth, we get a good impression of the company. So while we'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has GUD Holdings Limited Been A Good Investment?

With a total shareholder return of 4.0% over three years, GUD Holdings Limited has done okay by shareholders, but there's always room for improvement. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for GUD Holdings that investors should think about before committing capital to this stock.

Important note: GUD Holdings 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. 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.

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