The decent performance at Remgro Limited (JSE:REM) recently will please most shareholders as they go into the AGM coming up on 30 November 2022. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. Here is our take on why we think CEO compensation is fair and may even warrant a raise.
Check out our latest analysis for Remgro
Comparing Remgro Limited's CEO Compensation With The Industry
According to our data, Remgro Limited has a market capitalization of R80b, and paid its CEO total annual compensation worth R15m over the year to June 2022. That's a fairly small increase of 4.0% over the previous year. Notably, the salary which is R12.1m, represents most of the total compensation being paid.
On examining similar-sized companies in the industry with market capitalizations between R34b and R109b, we discovered that the median CEO total compensation of that group was R28m. That is to say, Jannie Durand is paid under the industry median. Moreover, Jannie Durand also holds R121m worth of Remgro stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2022 | 2021 | Proportion (2022) |
| Salary | R12m | R12m | 79% |
| Other | R3.3m | R3.2m | 21% |
| Total Compensation | R15m | R15m | 100% |
Talking in terms of the industry, salary represented approximately 63% of total compensation out of all the companies we analyzed, while other remuneration made up 37% of the pie. Remgro pays out 79% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Remgro Limited's Growth
Remgro Limited's earnings per share (EPS) grew 116% per year over the last three years. It achieved revenue growth of 16% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Remgro Limited Been A Good Investment?
Remgro Limited has not done too badly by shareholders, with a total return of 5.9%, over three years. It would be nice to see that metric improve in the future. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.