Performance at Argent Industrial Limited (JSE:ART) has been reasonably good and CEO Treve Hendry has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 20 August 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.
Comparing Argent Industrial Limited's CEO Compensation With the industry
According to our data, Argent Industrial Limited has a market capitalization of R651m, and paid its CEO total annual compensation worth R6.0m over the year to March 2021. That's a modest increase of 4.9% on the prior year. Notably, the salary which is R3.18m, represents a considerable chunk of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations under R2.9b, the reported median total CEO compensation was R1.6m. Hence, we can conclude that Treve Hendry is remunerated higher than the industry median. Moreover, Treve Hendry also holds R28m worth of Argent Industrial stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 57% of total compensation out of all the companies we analyzed, while other remuneration made up 43% of the pie. Our data reveals that Argent Industrial allocates salary more or less in line with the wider market. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Argent Industrial Limited's Growth
Argent Industrial Limited has seen its earnings per share (EPS) increase by 62% a year over the past three years. Its revenue is up 14% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Argent Industrial Limited Been A Good Investment?
Boasting a total shareholder return of 177% over three years, Argent Industrial 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.
Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay 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 can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Argent Industrial that you should be aware of before investing.
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’re looking to trade a wide range of investments, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted
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.
*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.