Reunert Limited's (JSE:RLO) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Reunert's Annual General Meeting to take place on 22nd of February
• Salary of R6.49m is part of CEO Alan Dickson's total remuneration
• The overall pay is 293% above the industry average
• Reunert's EPS grew by 170% over the past three years while total shareholder return over the past three years was 63%

CEO Alan Dickson has done a decent job of delivering relatively good performance at Reunert Limited (JSE:RLO) recently. As shareholders go into the upcoming AGM on 22nd 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 may still want to keep CEO compensation within reason.

View our latest analysis for Reunert

Comparing Reunert Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Reunert Limited has a market capitalization of R10b, and reported total annual CEO compensation of R21m for the year to September 2023. We note that's an increase of 15% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at R6.5m.

In comparison with other companies in the South Africa Industrials industry with market capitalizations ranging from R3.8b to R15b, the reported median CEO total compensation was R5.3m. This suggests that Alan Dickson is paid more than the median for the industry. Furthermore, Alan Dickson directly owns R5.6m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	R6.5m	R6.2m	31%
Other	R14m	R12m	69%
Total Compensation	R21m	R18m	100%

On an industry level, roughly 32% of total compensation represents salary and 68% is other remuneration. Although there is a difference in how total compensation is set, Reunert more or less reflects the market in terms of setting the salary. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Reunert Limited's Growth Numbers

Reunert Limited has seen its earnings per share (EPS) increase by 170% a year over the past three years. Its revenue is up 24% 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. 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 Reunert Limited Been A Good Investment?

Most shareholders would probably be pleased with Reunert Limited for providing a total return of 63% over three years. 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 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 can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Reunert that investors should look into moving forward.

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.

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.