Here's Why Shareholders Should Examine GoPro, Inc.'s (NASDAQ:GPRO) CEO Compensation Package More Closely

Key Insights

• GoPro's Annual General Meeting to take place on 4th of June
• CEO Nick Woodman's total compensation includes salary of US$850.0k
• The total compensation is 113% higher than the average for the industry
• GoPro's EPS declined by 88% over the past three years while total shareholder loss over the past three years was 86%

The results at GoPro, Inc. (NASDAQ:GPRO) have been quite disappointing recently and CEO Nick Woodman bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 4th 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 GoPro

How Does Total Compensation For Nick Woodman Compare With Other Companies In The Industry?

Our data indicates that GoPro, Inc. has a market capitalization of US$235m, and total annual CEO compensation was reported as US$5.7m for the year to December 2023. Notably, that's an increase of 18% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$850k.

On examining similar-sized companies in the American Consumer Durables industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$2.7m. Accordingly, our analysis reveals that GoPro, Inc. pays Nick Woodman north of the industry median. What's more, Nick Woodman holds US$40m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	US$850k	US$850k	15%
Other	US$4.8m	US$3.9m	85%
Total Compensation	US$5.7m	US$4.8m	100%

Speaking on an industry level, nearly 17% of total compensation represents salary, while the remainder of 83% is other remuneration. GoPro pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

GoPro, Inc.'s Growth

Over the last three years, GoPro, Inc. has shrunk its earnings per share by 88% per year. It saw its revenue drop 6.2% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 GoPro, Inc. Been A Good Investment?

Few GoPro, Inc. shareholders would feel satisfied with the return of -86% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

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, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for GoPro that investors should look into moving forward.

Switching gears from GoPro, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.