Shareholders May Be Wary Of Increasing Grand City Properties S.A.'s (ETR:GYC) CEO Compensation Package

Key Insights

• Grand City Properties to hold its Annual General Meeting on 26th of June
• Salary of €711.0k is part of CEO Refael Zamir's total remuneration
• The total compensation is similar to the average for the industry
• Over the past three years, Grand City Properties' EPS fell by 89% and over the past three years, the total loss to shareholders 50%

Grand City Properties S.A. (ETR:GYC) has not performed well recently and CEO Refael Zamir will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 26th of June. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Grand City Properties

How Does Total Compensation For Refael Zamir Compare With Other Companies In The Industry?

Our data indicates that Grand City Properties S.A. has a market capitalization of €1.8b, and total annual CEO compensation was reported as €1.6m for the year to December 2023. We note that's an increase of 16% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €711k.

On examining similar-sized companies in the German Real Estate industry with market capitalizations between €931m and €3.0b, we discovered that the median CEO total compensation of that group was €1.3m. So it looks like Grand City Properties compensates Refael Zamir in line with the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	€711k	€563k	45%
Other	€853k	€786k	55%
Total Compensation	€1.6m	€1.3m	100%

Talking in terms of the industry, salary represented approximately 58% of total compensation out of all the companies we analyzed, while other remuneration made up 42% of the pie. Grand City Properties sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Grand City Properties S.A.'s Growth

Grand City Properties S.A. has reduced its earnings per share by 89% a year over the last three years. In the last year, its revenue is up 1.3%.

Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Grand City Properties S.A. Been A Good Investment?

The return of -50% over three years would not have pleased Grand City Properties S.A. shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for Grand City Properties (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.

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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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com