Shareholders Will Probably Not Have Any Issues With Pan African Resources PLC's (LON:PAF) CEO Compensation

Key Insights

• Pan African Resources to hold its Annual General Meeting on 21st of November
• Total pay for CEO Cobus Loots includes US$412.0k salary
• Total compensation is similar to the industry average
• Pan African Resources' total shareholder return over the past three years was 84% while its EPS grew by 2.3% over the past three years

Performance at Pan African Resources PLC (LON:PAF) has been reasonably good and CEO Cobus Loots has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 21st of November. Here is our take on why we think the CEO compensation looks appropriate.

View our latest analysis for Pan African Resources

How Does Total Compensation For Cobus Loots Compare With Other Companies In The Industry?

At the time of writing, our data shows that Pan African Resources PLC has a market capitalization of UK£612m, and reported total annual CEO compensation of US$1.2m for the year to June 2024. That's a notable decrease of 41% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$412k.

On examining similar-sized companies in the British Metals and Mining industry with market capitalizations between UK£315m and UK£1.3b, we discovered that the median CEO total compensation of that group was US$1.2m. This suggests that Pan African Resources remunerates its CEO largely in line with the industry average. Furthermore, Cobus Loots directly owns UK£2.1m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	US$412k	US$407k	33%
Other	US$818k	US$1.7m	67%
Total Compensation	US$1.2m	US$2.1m	100%

On an industry level, roughly 79% of total compensation represents salary and 21% is other remuneration. Pan African Resources sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Pan African Resources PLC's Growth Numbers

Over the past three years, Pan African Resources PLC has seen its earnings per share (EPS) grow by 2.3% per year. Its revenue is up 17% over the last year.

We think the revenue growth is good. And the improvement in EPSis modest but respectable. So while performance isn't amazing, we think it really does seem quite respectable. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Pan African Resources PLC Been A Good Investment?

We think that the total shareholder return of 84%, over three years, would leave most Pan African Resources PLC shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

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. In our study, we found 2 warning signs for Pan African Resources you should be aware of, and 1 of them can't be ignored.

Important note: Pan African Resources 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.