How Does GTN's (ASX:GTN) CEO Pay Compare With Company Performance?

Bill Yde became the CEO of GTN Limited (ASX:GTN) in 2005, 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 GTN.

See 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$81m, and paid its CEO total annual compensation worth AU$1.7m over the year to June 2020. We note that's an increase of 19% above last year. Notably, the salary which is AU$1.16m, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below AU$282m, we found that the median total CEO compensation was AU$538k. Hence, we can conclude that Bill Yde is remunerated higher than the industry median. Furthermore, Bill Yde directly owns AU$1.1m worth of shares in the company.

Speaking on an industry level, nearly 69% of total compensation represents salary, while the remainder of 31% is other remuneration. Our data reveals that GTN allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

GTN Limited's Growth

Over the last three years, GTN Limited has shrunk its earnings per share by 78% per year. Its revenue is down 13% over the previous year.

Few shareholders would be pleased to read that EPS have declined. 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 GTN Limited Been A Good Investment?

Given the total shareholder loss of 85% over three years, many shareholders in GTN Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As previously discussed, Bill is compensated more than what is normal for CEOs of companies of similar size, and which belong 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. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

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. We've identified 3 warning signs for GTN that investors should be aware of in a dynamic business environment.

Important note: GTN 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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