How Does Finbond Group's (JSE:FGL) CEO Salary Compare to Peers?

The CEO of Finbond Group Limited (JSE:FGL) is Willie Van Aardt, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Finbond Group

How Does Total Compensation For Willie Van Aardt Compare With Other Companies In The Industry?

Our data indicates that Finbond Group Limited has a market capitalization of R885m, and total annual CEO compensation was reported as R42m for the year to February 2020. That's a notable increase of 21% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at R16m.

In comparison with other companies in the industry with market capitalizations under R2.9b, the reported median total CEO compensation was R6.4m. Accordingly, our analysis reveals that Finbond Group Limited pays Willie Van Aardt north of the industry median.

Talking in terms of the industry, salary represented approximately 60% of total compensation out of all the companies we analyzed, while other remuneration made up 40% of the pie. Finbond Group pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Finbond Group Limited's Growth Numbers

Over the last three years, Finbond Group Limited has shrunk its earnings per share by 88% per year. It saw its revenue drop 13% over the last year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Finbond Group Limited Been A Good Investment?

Since shareholders would have lost about 66% over three years, some Finbond Group Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we touched on above, Finbond Group Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look good against shareholder returns, which have been negative for the past three years. What's equally worrying is that the company isn't growing by our analysis. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Finbond Group (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the 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.

If you decide to trade Finbond Group, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.