We Think Shareholders Are Less Likely To Approve A Large Pay Rise For South Ocean Holdings Limited's (JSE:SOH) CEO For Now

Key Insights

• South Ocean Holdings to hold its Annual General Meeting on 31st of July
• CEO Andre Smith's total compensation includes salary of R4.87m
• Total compensation is 74% above industry average
• Over the past three years, South Ocean Holdings' EPS grew by 60% and over the past three years, the total shareholder return was 251%

CEO Andre Smith has done a decent job of delivering relatively good performance at South Ocean Holdings Limited (JSE:SOH) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 31st of July. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for South Ocean Holdings

How Does Total Compensation For Andre Smith Compare With Other Companies In The Industry?

Our data indicates that South Ocean Holdings Limited has a market capitalization of R535m, and total annual CEO compensation was reported as R5.4m for the year to December 2023. We note that's an increase of 14% above last year. We note that the salary portion, which stands at R4.87m constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the South Africa Electrical industry with market capitalizations below R3.7b, we found that the median total CEO compensation was R3.1m. This suggests that Andre Smith is paid more than the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	R4.9m	R4.3m	91%
Other	R493k	R398k	9%
Total Compensation	R5.4m	R4.7m	100%

On an industry level, roughly 54% of total compensation represents salary and 46% is other remuneration. It's interesting to note that South Ocean Holdings pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at South Ocean Holdings Limited's Growth Numbers

Over the past three years, South Ocean Holdings Limited has seen its earnings per share (EPS) grow by 60% per year. In the last year, its revenue is up 26%.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast 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 South Ocean Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 251% over three years, South Ocean Holdings Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 4 warning signs for South Ocean Holdings you should be aware of, and 1 of them is potentially serious.

Switching gears from South Ocean Holdings, 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.

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