Centuria Capital Group is gearing up for its Annual General Meeting (AGM) slated for November 17, where shareholders are set to evaluate the company's performance and deliberate on key issues, including the contentious executive compensation. Today's details reveal that CEO John McBain's remuneration package, which includes a AU$1.55 million salary, towers an impressive 153% over the industry average for Australian REITs of comparable size.
Despite Centuria's robust revenue surge of 23% last year, the company has not seen this growth reflected in its earnings per share (EPS), which dipped by 5.2% over the past three years. The shareholders have felt this underperformance, witnessing a stark 40% loss during the same timeframe. McBain's total compensation for the year ending June 2023 stood at AU$4.4 million, marking a modest reduction of 7.1% from the previous year.
The CEO's pay packet has raised eyebrows when compared to peers within the industry, where the median CEO compensation is AU$1.7 million. McBain also has a considerable investment in Centuria, owning AU$9.7 million worth of stock, aligning his interests with those of shareholders.
The structure of Centuria's compensation scheme reveals that about 39% is fixed salary, while the remaining 61% comprises other forms of remuneration, suggesting a large part of executive pay is tied to performance metrics. However, with EPS declining and shareholder returns in negative territory over a three-year span, questions are likely to be asked about whether such a lucrative pay structure is justified.
As Centuria's AGM looms on the horizon, investors are encouraged to closely scrutinize CEO compensation against company performance indicators. The recent financial history serves as a cautionary tale, highlighting the need for shareholder vigilance as they prepare to engage with the board on these pressing matters at the upcoming meeting.
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