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We Think Shareholders May Want To Consider A Review Of GDI Property Group's (ASX:GDI) CEO Compensation Package
GDI Property Group (ASX:GDI) has not performed well recently and CEO Steve Gillard will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 10 November 2022. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.
Check out the opportunities and risks within the AU REITs industry.
Comparing GDI Property Group's CEO Compensation With The Industry
According to our data, GDI Property Group has a market capitalization of AU$412m, and paid its CEO total annual compensation worth AU$1.7m over the year to June 2022. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$738k.
For comparison, other companies in the same industry with market capitalizations ranging between AU$156m and AU$624m had a median total CEO compensation of AU$692k. Accordingly, our analysis reveals that GDI Property Group pays Steve Gillard north of the industry median. Furthermore, Steve Gillard directly owns AU$24m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2022 | 2021 | Proportion (2022) |
Salary | AU$738k | AU$740k | 44% |
Other | AU$933k | AU$922k | 56% |
Total Compensation | AU$1.7m | AU$1.7m | 100% |
On an industry level, around 40% of total compensation represents salary and 60% is other remuneration. GDI Property Group is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
GDI Property Group's Growth
Over the last three years, GDI Property Group has shrunk its funds from operations (FFO) by 16% per year. Its revenue is down 19% over the previous year.
Overall this is not a very positive result for shareholders. 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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has GDI Property Group Been A Good Investment?
With a total shareholder return of -39% over three years, GDI Property Group shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for GDI Property Group that investors should be aware of in a dynamic business environment.
Switching gears from GDI Property Group, 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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Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
About ASX:GDI
GDI Property Group
GDI is an integrated, internally managed commercial property investor with capabilities in the identification and execution of acquisition opportunities, and then the ownership, management, development, refurbishment, leasing, and syndication of assets.
Proven track record average dividend payer.