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Geoff Jones has been the CEO of GR Engineering Services Limited (ASX:GNG) since 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for GR Engineering Services
How Does Geoff Jones's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that GR Engineering Services Limited has a market cap of AU$153m, and is paying total annual CEO compensation of AU$897k. (This is based on the year to June 2018). While we always look at total compensation first, we note that the salary component is less, at AU$580k. We looked at a group of companies with market capitalizations under AU$284m, and the median CEO total compensation was AU$354k.
Thus we can conclude that Geoff Jones receives more in total compensation than the median of a group of companies in the same market, and of similar size to GR Engineering Services Limited. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at GR Engineering Services has changed over time.
Is GR Engineering Services Limited Growing?
Over the last three years GR Engineering Services Limited has shrunk its earnings per share by an average of 25% per year (measured with a line of best fit). In the last year, its revenue is down -36%.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has GR Engineering Services Limited Been A Good Investment?
GR Engineering Services Limited has served shareholders reasonably well, with a total return of 33% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
We examined the amount GR Engineering Services Limited pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.