It's Unlikely That The CEO Of Gullewa Limited (ASX:GUL) Will See A Huge Pay Rise This Year

Key Insights

• Gullewa to hold its Annual General Meeting on 28th of November
• CEO David Deitz's total compensation includes salary of AU$350.0k
• Total compensation is similar to the industry average
• Gullewa's EPS grew by 9.9% over the past three years while total shareholder loss over the past three years was 25%

Shareholders of Gullewa Limited (ASX:GUL) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 28th of November could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Gullewa

How Does Total Compensation For David Deitz Compare With Other Companies In The Industry?

According to our data, Gullewa Limited has a market capitalization of AU$13m, and paid its CEO total annual compensation worth AU$457k over the year to June 2024. This means that the compensation hasn't changed much from last year. Notably, the salary which is AU$350.0k, represents most of the total compensation being paid.

For comparison, other companies in the Australian Metals and Mining industry with market capitalizations below AU$308m, reported a median total CEO compensation of AU$388k. So it looks like Gullewa compensates David Deitz in line with the median for the industry. Furthermore, David Deitz directly owns AU$3.5m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	AU$350k	AU$291k	77%
Other	AU$107k	AU$158k	23%
Total Compensation	AU$457k	AU$448k	100%

On an industry level, roughly 63% of total compensation represents salary and 37% is other remuneration. It's interesting to note that Gullewa pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Gullewa Limited's Growth

Gullewa Limited's earnings per share (EPS) grew 9.9% per year over the last three years. In the last year, its revenue is up 30%.

It's great to see that revenue growth is strong. And in that context, the modest EPS improvement certainly isn't shabby. So while we'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! 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 Gullewa Limited Been A Good Investment?

Since shareholders would have lost about 25% over three years, some Gullewa Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 4 warning signs for Gullewa you should be aware of, and 2 of them make us uncomfortable.

Switching gears from Gullewa, 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.