The CEO of Gullewa Limited (ASX:GUL) is David Deitz, and this article examines 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 Gullewa.
Check out our latest analysis for Gullewa
Comparing Gullewa Limited's CEO Compensation With the industry
Our data indicates that Gullewa Limited has a market capitalization of AU$18m, and total annual CEO compensation was reported as AU$295k 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$160.0k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the industry with market capitalizations below AU$264m, reported a median total CEO compensation of AU$311k. So it looks like Gullewa compensates David Deitz in line with the median for the industry. Moreover, David Deitz also holds AU$4.4m worth of Gullewa stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$160k | AU$160k | 54% |
| Other | AU$135k | AU$131k | 46% |
| Total Compensation | AU$295k | AU$291k | 100% |
On an industry level, roughly 70% of total compensation represents salary and 30% is other remuneration. Gullewa 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.
Gullewa Limited's Growth
Gullewa Limited's earnings per share (EPS) grew 51% per year over the last three years. It achieved revenue growth of 38% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Gullewa Limited Been A Good Investment?
Boasting a total shareholder return of 358% over three years, Gullewa Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
As we touched on above, Gullewa Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Few would be critical of the leadership, since returns have been juicy and EPS are moving in the right direction. So one could argue that CEO compensation is quite modest, if you consider company performance! Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.
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 5 warning signs for Gullewa that investors should think about before committing capital to this stock.
Important note: Gullewa 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:GUL
Gullewa
Engages in the exploration, evaluation, and mining of mineral properties in Australia.
Flawless balance sheet with solid track record.
