It's Unlikely That Shareholders Will Increase Gowing Bros. Limited's (ASX:GOW) Compensation By Much This Year

Key Insights

• Gowing Bros to hold its Annual General Meeting on 27th of November
• CEO John Gowing's total compensation includes salary of AU$162.1k
• The total compensation is 67% less than the average for the industry
• Over the past three years, Gowing Bros' EPS fell by 95% and over the past three years, the total loss to shareholders 28%

The underwhelming performance at Gowing Bros. Limited (ASX:GOW) recently has probably not pleased shareholders. The next AGM coming up on 27th of November will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. We think most shareholders will probably pass the CEO compensation, based on what we gathered.

Check out our latest analysis for Gowing Bros

Comparing Gowing Bros. Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Gowing Bros. Limited has a market capitalization of AU$111m, and reported total annual CEO compensation of AU$180k for the year to July 2024. We note that's a small decrease of 6.5% on last year. In particular, the salary of AU$162.1k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Australian Diversified Financial industry with market capitalizations under AU$308m, the reported median total CEO compensation was AU$548k. That is to say, John Gowing is paid under the industry median. Furthermore, John Gowing directly owns AU$44m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	AU$162k	AU$163k	90%
Other	AU$18k	AU$30k	10%
Total Compensation	AU$180k	AU$193k	100%

Talking in terms of the industry, salary represented approximately 67% of total compensation out of all the companies we analyzed, while other remuneration made up 33% of the pie. According to our research, Gowing Bros has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Gowing Bros. Limited's Growth

Over the last three years, Gowing Bros. Limited has shrunk its earnings per share by 95% per year. It saw its revenue drop 6.6% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Gowing Bros. Limited Been A Good Investment?

Since shareholders would have lost about 28% over three years, some Gowing Bros. 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...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for Gowing Bros (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.

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.

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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.