Here's Why Shareholders Will Not Be Complaining About Reunert Limited's (JSE:RLO) CEO Pay Packet

Key Insights

• Reunert will host its Annual General Meeting on 25th of February
• CEO Alan Dickson's total compensation includes salary of R6.91m
• Total compensation is similar to the industry average
• Reunert's total shareholder return over the past three years was 54% while its EPS grew by 11% over the past three years

It would be hard to discount the role that CEO Alan Dickson has played in delivering the impressive results at Reunert Limited (JSE:RLO) recently. Coming up to the next AGM on 25th of February, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

See our latest analysis for Reunert

How Does Total Compensation For Alan Dickson Compare With Other Companies In The Industry?

Our data indicates that Reunert Limited has a market capitalization of R10b, and total annual CEO compensation was reported as R25m for the year to September 2024. We note that's an increase of 22% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at R6.9m.

In comparison with other companies in the South Africa Industrials industry with market capitalizations ranging from R3.7b to R15b, the reported median CEO total compensation was R24m. This suggests that Reunert remunerates its CEO largely in line with the industry average. Moreover, Alan Dickson also holds R6.0m worth of Reunert stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	R6.9m	R6.5m	27%
Other	R18m	R14m	73%
Total Compensation	R25m	R21m	100%

Talking in terms of the industry, salary represented approximately 37% of total compensation out of all the companies we analyzed, while other remuneration made up 63% of the pie. It's interesting to note that Reunert allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Reunert Limited's Growth

Reunert Limited has seen its earnings per share (EPS) increase by 11% a year over the past three years. It achieved revenue growth of 4.8% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Reunert Limited Been A Good Investment?

Boasting a total shareholder return of 54% over three years, Reunert Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Reunert that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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.