A Look At GTN's (ASX:GTN) CEO Remuneration

This article will reflect on the compensation paid to Bill Yde who has served as CEO of GTN Limited (ASX:GTN) since 2005. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for GTN.

View our latest analysis for GTN

How Does Total Compensation For Bill Yde Compare With Other Companies In The Industry?

According to our data, GTN Limited has a market capitalization of AU$125m, and paid its CEO total annual compensation worth AU$1.7m over the year to June 2020. Notably, that's an increase of 19% over the year before. We note that the salary portion, which stands at AU$1.16m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under AU$254m, the reported median total CEO compensation was AU$615k. This suggests that Bill Yde is paid more than the median for the industry. Moreover, Bill Yde also holds AU$1.6m worth of GTN stock directly under their own name.

On an industry level, around 68% of total compensation represents salary and 32% is other remuneration. Our data reveals that GTN allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

GTN Limited's Growth

Over the last three years, GTN Limited has shrunk its earnings per share by 78% per year. It saw its revenue drop 13% 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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has GTN Limited Been A Good Investment?

Since shareholders would have lost about 72% over three years, some GTN Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we noted earlier, GTN pays its CEO higher than the norm for similar-sized companies belonging to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 4 warning signs for GTN that investors should be aware of in a dynamic business environment.

Switching gears from GTN, 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. 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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