ikeGPS Group Limited's (NZSE:IKE) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• ikeGPS Group will host its Annual General Meeting on 27th of September
• CEO Glenn Milnes' total compensation includes salary of NZ$1.09m
• Total compensation is 124% above industry average
• ikeGPS Group's EPS declined by 14% over the past three years while total shareholder loss over the past three years was 45%

ikeGPS Group Limited (NZSE:IKE) has not performed well recently and CEO Glenn Milnes will probably need to up their game. At the upcoming AGM on 27th of September, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for ikeGPS Group

Comparing ikeGPS Group Limited's CEO Compensation With The Industry

At the time of writing, our data shows that ikeGPS Group Limited has a market capitalization of NZ$93m, and reported total annual CEO compensation of NZ$1.3m for the year to March 2024. That's mostly flat as compared to the prior year's compensation. In particular, the salary of NZ$1.09m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the New Zealand Electronic industry with market capitalizations below NZ$320m, reported a median total CEO compensation of NZ$586k. Hence, we can conclude that Glenn Milnes is remunerated higher than the industry median.

Component	2024	2023	Proportion (2024)
Salary	NZ$1.1m	NZ$1.0m	83%
Other	NZ$218k	NZ$311k	17%
Total Compensation	NZ$1.3m	NZ$1.3m	100%

On an industry level, roughly 66% of total compensation represents salary and 34% is other remuneration. It's interesting to note that ikeGPS Group pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ikeGPS Group Limited's Growth

Over the last three years, ikeGPS Group Limited has shrunk its earnings per share by 14% per year. Its revenue is down 31% over the previous year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 ikeGPS Group Limited Been A Good Investment?

Few ikeGPS Group Limited shareholders would feel satisfied with the return of -45% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

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 ikeGPS Group (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

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.