How Much Is Good Drinks Australia's (ASX:GDA) CEO Getting Paid?
John Hoedemaker became the CEO of Good Drinks Australia Ltd (ASX:GDA) in 2011, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Good Drinks Australia.
Check out our latest analysis for Good Drinks Australia
How Does Total Compensation For John Hoedemaker Compare With Other Companies In The Industry?
Our data indicates that Good Drinks Australia Ltd has a market capitalization of AU$94m, and total annual CEO compensation was reported as AU$478k for the year to June 2020. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at AU$370.5k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the industry with market capitalizations below AU$258m, reported a median total CEO compensation of AU$475k. This suggests that Good Drinks Australia remunerates its CEO largely in line with the industry average. What's more, John Hoedemaker holds AU$4.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$371k | AU$390k | 78% |
| Other | AU$107k | AU$86k | 22% |
| Total Compensation | AU$478k | AU$476k | 100% |
On an industry level, roughly 52% of total compensation represents salary and 48% is other remuneration. Good Drinks Australia is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Good Drinks Australia Ltd's Growth
Over the last three years, Good Drinks Australia Ltd has shrunk its earnings per share by 45% per year. In the last year, its revenue is down 6.3%.
Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-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 Good Drinks Australia Ltd Been A Good Investment?
Since shareholders would have lost about 20% over three years, some Good Drinks Australia Ltd 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 previously discussed, John is compensated close to the median for companies of its size, and which belong to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over 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.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for Good Drinks Australia that you should be aware of before investing.
Important note: Good Drinks Australia 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.
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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 ASX:GDA
Good Drinks Australia
Engages in manufactures, markets, and distributes beer, cider, and other beverages in Australia.
Low and slightly overvalued.
