How Much Is G8 Education Limited (ASX:GEM) Paying Its CEO?

Gary Carroll became the CEO of G8 Education Limited (ASX:GEM) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether G8 Education pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for G8 Education

Comparing G8 Education Limited's CEO Compensation With the industry

According to our data, G8 Education Limited has a market capitalization of AU$919m, and paid its CEO total annual compensation worth AU$831k over the year to December 2020. We note that's an increase of 9.0% above last year. In particular, the salary of AU$736.5k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the same industry with market caps ranging from AU$503m to AU$2.0b, we found that the median CEO total compensation was AU$1.6m. This suggests that Gary Carroll is paid below the industry median. What's more, Gary Carroll holds AU$188k worth of shares in the company in their own name.

Speaking on an industry level, nearly 76% of total compensation represents salary, while the remainder of 24% is other remuneration. G8 Education pays out 89% of remuneration in the form of a salary, significantly higher than the industry average. 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.

G8 Education Limited's Growth

G8 Education Limited has reduced its earnings per share by 97% a year over the last three years. It saw its revenue drop 15% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 G8 Education Limited Been A Good Investment?

Given the total shareholder loss of 52% over three years, many shareholders in G8 Education Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we touched on above, G8 Education Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. EPS growth has failed to impress us, and the same can be said about shareholder returns. Although we wouldn’t say CEO compensation is high, it’s tough to foresee shareholders warming up to thoughts of a bump anytime soon.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for G8 Education that investors should look into moving forward.

Switching gears from G8 Education, 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.

This article by Simply Wall St is general in nature. 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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