What Can We Learn About DRDGOLD's (NYSE:DRD) CEO Compensation?

This article will reflect on the compensation paid to Niel Pretorius who has served as CEO of DRDGOLD Limited (NYSE:DRD) since 2009. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for DRDGOLD.

See our latest analysis for DRDGOLD

Comparing DRDGOLD Limited's CEO Compensation With the industry

According to our data, DRDGOLD Limited has a market capitalization of US$853m, and paid its CEO total annual compensation worth R19m over the year to June 2020. Notably, that's an increase of 44% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at R6.9m.

On examining similar-sized companies in the industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was R31m. In other words, DRDGOLD pays its CEO lower than the industry median. Moreover, Niel Pretorius also holds US$499k worth of DRDGOLD stock directly under their own name.

Speaking on an industry level, nearly 36% of total compensation represents salary, while the remainder of 64% is other remuneration. Our data reveals that DRDGOLD allocates salary more or less in line with the wider market. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at DRDGOLD Limited's Growth Numbers

Over the past three years, DRDGOLD Limited has seen its earnings per share (EPS) grow by 194% per year. In the last year, its revenue is up 51%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has DRDGOLD Limited Been A Good Investment?

Boasting a total shareholder return of 257% over three years, DRDGOLD Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

As we noted earlier, DRDGOLD pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Considering robust EPS growth, we believe Niel to be modestly paid. Given the strong history of shareholder returns, the shareholders are probably very happy with Niel's 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 2 warning signs for DRDGOLD that investors should think about before committing capital to this stock.

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. 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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