This article will reflect on the compensation paid to Billy Ferreira who has served as CEO of The GO2 People Limited (ASX:GO2) since 2017. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for GO2 People.
How Does Total Compensation For Billy Ferreira Compare With Other Companies In The Industry?
At the time of writing, our data shows that The GO2 People Limited has a market capitalization of AU$5.9m, and reported total annual CEO compensation of AU$329k for the year to June 2020. That's a notable decrease of 8.2% on last year. In particular, the salary of AU$281.3k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below AU$281m, reported a median total CEO compensation of AU$441k. From this we gather that Billy Ferreira is paid around the median for CEOs in the industry.
On an industry level, around 73% of total compensation represents salary and 27% is other remuneration. According to our research, GO2 People has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
The GO2 People Limited's Growth
The GO2 People Limited has seen its earnings per share (EPS) increase by 90% a year over the past three years. In the last year, its revenue is down 37%.
This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has The GO2 People Limited Been A Good Investment?
With a three year total loss of 79% for the shareholders, The GO2 People Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
As we noted earlier, GO2 People pays its CEO in line with similar-sized companies belonging to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. However, EPS growth is positive over the same time frame. Overall, we wouldn't say Billy is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for GO2 People (2 shouldn't be ignored!) that you should be aware of before investing here.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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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