We Take A Look At Why Pan African Resources PLC's (LON:PAF) CEO Compensation Is Well Earned

We have been pretty impressed with the performance at Pan African Resources PLC (LON:PAF) recently and CEO Cobus Loots deserves a mention for their role in it. Coming up to the next AGM on 25 November 2021, shareholders would be keeping this in mind. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

View our latest analysis for Pan African Resources

Comparing Pan African Resources PLC's CEO Compensation With the industry

According to our data, Pan African Resources PLC has a market capitalization of UK£385m, and paid its CEO total annual compensation worth US$812k over the year to June 2021. That's a notable decrease of 21% on last year. We note that the salary of US$416.8k makes up a sizeable portion of the total compensation received by the CEO.

On examining similar-sized companies in the industry with market capitalizations between UK£148m and UK£594m, we discovered that the median CEO total compensation of that group was US$789k. This suggests that Pan African Resources remunerates its CEO largely in line with the industry average. Moreover, Cobus Loots also holds UK£1.3m worth of Pan African Resources stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	US$417k	US$396k	51%
Other	US$395k	US$635k	49%
Total Compensation	US$812k	US$1.0m	100%

On an industry level, around 61% of total compensation represents salary and 39% is other remuneration. In Pan African Resources' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Pan African Resources PLC's Growth

Over the past three years, Pan African Resources PLC has seen its earnings per share (EPS) grow by 65% per year. In the last year, its revenue is up 35%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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?

Boasting a total shareholder return of 131% over three years, Pan African Resources PLC has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Pan African Resources that investors should be aware of in a dynamic business environment.

Switching gears from Pan African Resources, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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.

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