General Capital Limited's (NZSE:GEN) CEO Compensation Looks Acceptable To Us And Here's Why

Shareholders may be wondering what CEO Brent King plans to do to improve the less than great performance at General Capital Limited (NZSE:GEN) recently. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 28 September 2022. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

Check out our latest analysis for General Capital

How Does Total Compensation For Brent King Compare With Other Companies In The Industry?

According to our data, General Capital Limited has a market capitalization of NZ$12m, and paid its CEO total annual compensation worth NZ$273k over the year to March 2022. Notably, that's an increase of 31% over the year before. We note that the salary of NZ$146.0k 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 NZ$339m, the reported median total CEO compensation was NZ$812k. This suggests that Brent King is paid below the industry median. Furthermore, Brent King directly owns NZ$1.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	NZ$146k	NZ$137k	54%
Other	NZ$127k	NZ$72k	46%
Total Compensation	NZ$273k	NZ$209k	100%

On an industry level, around 54% of total compensation represents salary and 46% is other remuneration. Although there is a difference in how total compensation is set, General Capital more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

General Capital Limited's Growth

General Capital Limited has seen its earnings per share (EPS) increase by 113% a year over the past three years. It achieved revenue growth of 67% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has General Capital Limited Been A Good Investment?

With a total shareholder return of -33% over three years, General Capital Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders have earned a negative share price return is certainly disconcerting. This diverges with the robust growth in EPS, suggesting that there is a large discrepancy between share price and fundamentals. There needs to be more focus by management and the board to examine why the share price has diverged from fundamentals. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 4 warning signs for General Capital you should be aware of, and 2 of them are potentially serious.

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.