Shareholders Will Probably Hold Off On Increasing Argent Industrial Limited's (JSE:ART) CEO Compensation For The Time Being

Key Insights

• Argent Industrial to hold its Annual General Meeting on 22nd of August
• CEO Treve Hendry's total compensation includes salary of R3.81m
• The total compensation is 275% higher than the average for the industry
• Argent Industrial's total shareholder return over the past three years was 154% while its EPS grew by 27% over the past three years

CEO Treve Hendry has done a decent job of delivering relatively good performance at Argent Industrial Limited (JSE:ART) recently. As shareholders go into the upcoming AGM on 22nd of August, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.

Check out our latest analysis for Argent Industrial

How Does Total Compensation For Treve Hendry Compare With Other Companies In The Industry?

Our data indicates that Argent Industrial Limited has a market capitalization of R1.3b, and total annual CEO compensation was reported as R8.9m for the year to March 2024. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at R3.8m.

In comparison with other companies in the South Africa Building industry with market capitalizations under R3.6b, the reported median total CEO compensation was R2.4m. Accordingly, our analysis reveals that Argent Industrial Limited pays Treve Hendry north of the industry median. What's more, Treve Hendry holds R74m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	R3.8m	R3.6m	43%
Other	R5.1m	R5.2m	57%
Total Compensation	R8.9m	R8.8m	100%

On an industry level, around 51% of total compensation represents salary and 49% is other remuneration. It's interesting to note that Argent Industrial allocates a smaller portion of compensation to salary in comparison 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.

Argent Industrial Limited's Growth

Argent Industrial Limited has seen its earnings per share (EPS) increase by 27% a year over the past three years. In the last year, its revenue is up 3.5%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Argent Industrial Limited Been A Good Investment?

Most shareholders would probably be pleased with Argent Industrial Limited for providing a total return of 154% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

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. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

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. We've identified 3 warning signs for Argent Industrial that investors should be aware of in a dynamic business environment.

Important note: Argent Industrial 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.

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

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.