Key Insights

• GoPro will host its Annual General Meeting on 4th of June
• Salary of US$850.0k is part of CEO Nick Woodman's total remuneration
• The total compensation is 113% higher than the average for the industry
• GoPro's EPS declined by 88% over the past three years while total shareholder loss over the past three years was 86%

Shareholders will probably not be too impressed with the underwhelming results at GoPro, Inc. (NASDAQ:GPRO) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 4th of June. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

Comparing GoPro, Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that GoPro, Inc. has a market capitalization of US$235m, and reported total annual CEO compensation of US$5.7m for the year to December 2023. That's a notable increase of 18% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$850k.

For comparison, other companies in the American Consumer Durables industry with market capitalizations ranging between US$100m and US$400m had a median total CEO compensation of US$2.7m. Hence, we can conclude that Nick Woodman is remunerated higher than the industry median. Moreover, Nick Woodman also holds US$40m worth of GoPro stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 17% of total compensation out of all the companies we analyzed, while other remuneration made up 83% of the pie. In GoPro's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

GoPro, Inc.'s Growth

GoPro, Inc. has reduced its earnings per share by 88% a year over the last three years. It saw its revenue drop 6.2% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has GoPro, Inc. Been A Good Investment?

Few GoPro, Inc. shareholders would feel satisfied with the return of -86% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

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, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for GoPro that you should be aware of before investing.

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.

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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.