John Hoedemaker became the CEO of Gage Roads Brewing Co. Limited (ASX:GRB) in 2011. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for Gage Roads Brewing
How Does John Hoedemaker's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Gage Roads Brewing Co. Limited has a market cap of AU$99m, and reported total annual CEO compensation of AU$476k for the year to June 2019. That's a fairly small increase of 0.8% on year before. We think total compensation is more important but we note that the CEO salary is lower, at AU$390k. We took a group of companies with market capitalizations below AU$291m, and calculated the median CEO total compensation to be AU$379k.
That means John Hoedemaker receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Gage Roads Brewing has changed over time.
Is Gage Roads Brewing Co. Limited Growing?
On average over the last three years, Gage Roads Brewing Co. Limited has grown earnings per share (EPS) by 10.0% each year (using a line of best fit). In the last year, its revenue is up 19%.
I would argue that the modest growth in revenue is a notable positive. And the modest growth in earnings per share isn't bad, either. Although we'll stop short of calling the stock a top performer, we think the company has potential. You might want to check this free visual report on analyst forecasts for future earnings.
Has Gage Roads Brewing Co. Limited Been A Good Investment?
I think that the total shareholder return of 132%, over three years, would leave most Gage Roads Brewing Co. Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
John Hoedemaker is paid around what is normal the leaders of comparable size companies.
While we would like to see improved growth metrics, there is no doubt that the total returns have been great, over the last three years. So all things considered I'd venture that the CEO pay is appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling Gage Roads Brewing shares (free trial).