Stock Analysis

We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Goodfellow Inc.'s (TSE:GDL) CEO For Now

TSX:GDL
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Performance at Goodfellow Inc. (TSE:GDL) has been reasonably good and CEO Patrick Goodfellow has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 22 June 2021. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for Goodfellow

How Does Total Compensation For Patrick Goodfellow Compare With Other Companies In The Industry?

At the time of writing, our data shows that Goodfellow Inc. has a market capitalization of CA$85m, and reported total annual CEO compensation of CA$506k for the year to November 2020. Notably, that's an increase of 35% over the year before. We note that the salary of CA$300.7k makes up a sizeable portion of the total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under CA$243m, the reported median total CEO compensation was CA$302k. Accordingly, our analysis reveals that Goodfellow Inc. pays Patrick Goodfellow north of the industry median. Moreover, Patrick Goodfellow also holds CA$610k worth of Goodfellow stock directly under their own name.

Component20202019Proportion (2020)
Salary CA$301k CA$318k 59%
Other CA$205k CA$57k 41%
Total CompensationCA$506k CA$375k100%

Speaking on an industry level, nearly 41% of total compensation represents salary, while the remainder of 59% is other remuneration. It's interesting to note that Goodfellow pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ceo-compensation
TSX:GDL CEO Compensation June 15th 2021

Goodfellow Inc.'s Growth

Over the past three years, Goodfellow Inc. has seen its earnings per share (EPS) grow by 118% per year. Its revenue is up 7.6% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Goodfellow Inc. Been A Good Investment?

We think that the total shareholder return of 57%, over three years, would leave most Goodfellow Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Goodfellow that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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