Increases to Barloworld Limited's (JSE:BAW) CEO Compensation Might Cool off for now

Key Insights

• Barloworld to hold its Annual General Meeting on 16th of February
• Salary of R11.2m is part of CEO Dominic Sewela's total remuneration
• The total compensation is 241% higher than the average for the industry
• Over the past three years, Barloworld's EPS grew by 74% and over the past three years, the total shareholder return was 24%

CEO Dominic Sewela has done a decent job of delivering relatively good performance at Barloworld Limited (JSE:BAW) recently. As shareholders go into the upcoming AGM on 16th of February, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

View our latest analysis for Barloworld

How Does Total Compensation For Dominic Sewela Compare With Other Companies In The Industry?

At the time of writing, our data shows that Barloworld Limited has a market capitalization of R14b, and reported total annual CEO compensation of R29m for the year to September 2023. That's a notable increase of 11% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at R11m.

On examining similar-sized companies in the South Africa Trade Distributors industry with market capitalizations between R7.6b and R30b, we discovered that the median CEO total compensation of that group was R8.6m. Accordingly, our analysis reveals that Barloworld Limited pays Dominic Sewela north of the industry median. Moreover, Dominic Sewela also holds R33m worth of Barloworld stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	R11m	R11m	38%
Other	R18m	R16m	62%
Total Compensation	R29m	R27m	100%

On an industry level, around 38% of total compensation represents salary and 62% is other remuneration. Barloworld is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Barloworld Limited's Growth

Barloworld Limited has seen its earnings per share (EPS) increase by 74% 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. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Barloworld Limited Been A Good Investment?

With a total shareholder return of 24% over three years, Barloworld Limited shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

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, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 2 warning signs (and 1 which can't be ignored) in Barloworld we think you should know about.

Switching gears from Barloworld, 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.

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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.