Yahoo Finance We Think Shareholders May Want To Consider A Review Of Grand City Properties S.A.'s (ETR:GYC) CEO Compensation Package
Key Insights
Grand City Properties' Annual General Meeting to take place on 26th of June
CEO Refael Zamir's total compensation includes salary of €711.0k
Total compensation is similar to the industry average
Grand City Properties' EPS declined by 89% over the past three years while total shareholder loss over the past three years was 50%
The results at Grand City Properties S.A. (ETR:GYC) have been quite disappointing recently and CEO Refael Zamir bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 26th 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. The data we present below explains why we think CEO compensation is not consistent with recent performance.
Check out our latest analysis for Grand City Properties
How Does Total Compensation For Refael Zamir Compare With Other Companies In The Industry?
Our data indicates that Grand City Properties S.A. has a market capitalization of €1.8b, and total annual CEO compensation was reported as €1.6m for the year to December 2023. Notably, that's an increase of 16% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at €711k.
On comparing similar companies from the German Real Estate industry with market caps ranging from €931m to €3.0b, we found that the median CEO total compensation was €1.3m. From this we gather that Refael Zamir is paid around the median for CEOs in the industry.
Component | 2023 | 2022 | Proportion (2023) |
Salary | €711k | €563k | 45% |
Other | €853k | €786k | 55% |
Total Compensation | €1.6m | €1.3m | 100% |
Talking in terms of the industry, salary represented approximately 58% of total compensation out of all the companies we analyzed, while other remuneration made up 42% of the pie. Grand City Properties sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Grand City Properties S.A.'s Growth Numbers
Over the last three years, Grand City Properties S.A. has shrunk its earnings per share by 89% per year. It achieved revenue growth of 1.3% over the last year.
Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Grand City Properties S.A. Been A Good Investment?
With a total shareholder return of -50% over three years, Grand City Properties S.A. shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Grand City Properties (1 is potentially serious!) that you should be aware of before investing here.
Important note: Grand City Properties is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
