Goodman must jump higher earnings hurdles

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After persistent pressure from proxy advisers and shareholders, Goodman Group is implementing tougher earnings hurdles for its CEO and management.

When your management team has $1.4 billion in equity incentives, it is fair to assume they will be highly aligned with the interests of shareholders who want stronger earnings per share growth.

Johns and Pryke have retained the company’s long-term incentive awards under a 10-year plan for senior executives while reducing the quantum of share awards to management.The board has slashed the number of rights under the fiscal 2023 awards for the CEO and founder Greg Goodman by 36 per cent. Also, the face valueFull vesting of awards will require almost 60 per cent growth in operating profit over four years, relative to the 2022 results which were up 25 per cent.

Goodman Group’s cash-flow outlook is particularly strong given it has such a high proportion of tenants in its properties who are not paying market-based rents.

 

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What shareholders want to hear is not about management having their mouths in the honey pot all the time but shareholders being given some reward through higher dividends as many people depend on this for their everyday living. Thirty cents per share is a joke!

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