Yahoo Finance Should Shareholders Have Second Thoughts About A Pay Rise For Global Education Communities Corp.'s (TSE:GEC) CEO This Year?
Key Insights
Global Education Communities' Annual General Meeting to take place on 23rd of February
CEO Toby Chu's total compensation includes salary of CA$312.0k
Total compensation is 49% below industry average
Over the past three years, Global Education Communities' EPS fell by 20% and over the past three years, the total loss to shareholders 44%
The disappointing performance at Global Education Communities Corp. (TSE:GEC) will make some shareholders rather disheartened. At the upcoming AGM on 23rd of February, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. From our analysis below, we think CEO compensation looks appropriate for now.
Check out our latest analysis for Global Education Communities
How Does Total Compensation For Toby Chu Compare With Other Companies In The Industry?
At the time of writing, our data shows that Global Education Communities Corp. has a market capitalization of CA$26m, and reported total annual CEO compensation of CA$312k for the year to August 2023. That's slightly lower by 7.1% over the previous year. Notably, the salary of CA$312k is the entirety of the CEO compensation.
On comparing similar-sized companies in the Canada Consumer Services industry with market capitalizations below CA$270m, we found that the median total CEO compensation was CA$612k. That is to say, Toby Chu is paid under the industry median. Furthermore, Toby Chu directly owns CA$3.3m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | CA$312k | CA$296k | 100% |
Other | - | CA$40k | - |
Total Compensation | CA$312k | CA$336k | 100% |
On an industry level, around 23% of total compensation represents salary and 77% is other remuneration. Speaking on a company level, Global Education Communities prefers to tread along a traditional path, disbursing all compensation through a salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Global Education Communities Corp.'s Growth
Over the last three years, Global Education Communities Corp. has shrunk its earnings per share by 20% per year. It achieved revenue growth of 11% over the last year.
Few shareholders would be pleased to read that EPS have declined. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Global Education Communities Corp. Been A Good Investment?
Few Global Education Communities Corp. shareholders would feel satisfied with the return of -44% over three years. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Global Education Communities pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 5 warning signs for Global Education Communities (2 are significant!) that you should be aware of before investing here.
Important note: Global Education Communities 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.
