We Think Shareholders Will Probably Be Generous With GR Engineering Services Limited's (ASX:GNG) CEO Compensation

We have been pretty impressed with the performance at GR Engineering Services Limited (ASX:GNG) recently and CEO Geoff Jones deserves a mention for their role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 23 November 2022. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

Check out the opportunities and risks within the AU Metals and Mining industry.

How Does Total Compensation For Geoff Jones Compare With Other Companies In The Industry?

Our data indicates that GR Engineering Services Limited has a market capitalization of AU$357m, and total annual CEO compensation was reported as AU$864k for the year to June 2022. That's slightly lower by 5.1% over the previous year. In particular, the salary of AU$621.3k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations ranging from AU$148m to AU$590m, the reported median CEO total compensation was AU$717k. So it looks like GR Engineering Services compensates Geoff Jones in line with the median for the industry. What's more, Geoff Jones holds AU$1.1m worth of shares in the company in their own name.

Component	2022	2021	Proportion (2022)
Salary	AU$621k	AU$580k	72%
Other	AU$243k	AU$330k	28%
Total Compensation	AU$864k	AU$910k	100%

On an industry level, around 60% of total compensation represents salary and 40% is other remuneration. GR Engineering Services 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.

GR Engineering Services Limited's Growth

GR Engineering Services Limited has seen its earnings per share (EPS) increase by 72% a year over the past three years. In the last year, its revenue is up 66%.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 GR Engineering Services Limited Been A Good Investment?

We think that the total shareholder return of 235%, over three years, would leave most GR Engineering Services Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

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 1 warning sign for GR Engineering Services that you should be aware of before investing.

Switching gears from GR Engineering Services, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.