We Think Some Shareholders May Hesitate To Increase Grit Real Estate Income Group Limited's (LON:GR1T) CEO Compensation

Key Insights

• Grit Real Estate Income Group will host its Annual General Meeting on 18th of December
• CEO Bronwyn Knight's total compensation includes salary of US$538.0k
• Total compensation is 222% above industry average
• Grit Real Estate Income Group's three-year loss to shareholders was 56% while its EPS grew by 78% over the past three years

The underwhelming share price performance of Grit Real Estate Income Group Limited (LON:GR1T) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 18th of December. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for Grit Real Estate Income Group

Comparing Grit Real Estate Income Group Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Grit Real Estate Income Group Limited has a market capitalization of UK£83m, and reported total annual CEO compensation of US$1.6m for the year to June 2023. That's a slight decrease of 7.1% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$538k.

On comparing similar-sized companies in the British Real Estate industry with market capitalizations below UK£159m, we found that the median total CEO compensation was US$502k. This suggests that Bronwyn Knight is paid more than the median for the industry. Moreover, Bronwyn Knight also holds UK£2.4m worth of Grit Real Estate Income Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$538k	US$498k	33%
Other	US$1.1m	US$1.2m	67%
Total Compensation	US$1.6m	US$1.7m	100%

On an industry level, roughly 64% of total compensation represents salary and 36% is other remuneration. It's interesting to note that Grit Real Estate Income Group allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Grit Real Estate Income Group Limited's Growth

Over the past three years, Grit Real Estate Income Group Limited has seen its earnings per share (EPS) grow by 78% per year. In the last year, its revenue is down 2.8%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Grit Real Estate Income Group Limited Been A Good Investment?

Few Grit Real Estate Income Group Limited shareholders would feel satisfied with the return of -56% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Grit Real Estate Income Group that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.