This Is Why We Think Geneva Finance Limited's (NZSE:GFL) CEO Might Get A Pay Rise Approved By Shareholders

The decent performance at Geneva Finance Limited (NZSE:GFL) recently will please most shareholders as they go into the AGM coming up on 15 September 2021. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.

Check out our latest analysis for Geneva Finance

How Does Total Compensation For David O'Connell Compare With Other Companies In The Industry?

Our data indicates that Geneva Finance Limited has a market capitalization of NZ$55m, and total annual CEO compensation was reported as NZ$528k for the year to March 2021. That's slightly lower by 6.7% over the previous year. It is worth noting that the CEO compensation consists entirely of the salary, worth NZ$528k.

On comparing similar-sized companies in the industry with market capitalizations below NZ$282m, we found that the median total CEO compensation was NZ$1.1m. In other words, Geneva Finance pays its CEO lower than the industry median. What's more, David O'Connell holds NZ$290k worth of shares in the company in their own name.

Component	2021	2020	Proportion (2021)
Salary	NZ$528k	NZ$516k	100%
Other	-	NZ$50k	-
Total Compensation	NZ$528k	NZ$566k	100%

On an industry level, roughly 37% of total compensation represents salary and 63% is other remuneration. At the company level, Geneva Finance pays David O'Connell solely through a salary, preferring to go down a conventional route. 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.

A Look at Geneva Finance Limited's Growth Numbers

Over the last three years, Geneva Finance Limited has not seen its earnings per share change much, though they have deteriorated slightly. It achieved revenue growth of 21% over the last year.

Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Geneva Finance Limited Been A Good Investment?

We think that the total shareholder return of 52%, over three years, would leave most Geneva Finance Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Geneva Finance pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. The company's overall performance, while not bad, could be better. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term 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. We did our research and identified 3 warning signs (and 1 which doesn't sit too well with us) in Geneva Finance we think you should know about.

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.
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