We Think Trellidor Holdings Limited's (JSE:TRL) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• Trellidor Holdings' Annual General Meeting to take place on 5th of December
• CEO Terry Dennison's total compensation includes salary of R3.42m
• The total compensation is 56% higher than the average for the industry
• Trellidor Holdings' three-year loss to shareholders was 50% while its EPS was down 3.9% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at Trellidor Holdings Limited (JSE:TRL) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 5th of December. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Trellidor Holdings

Comparing Trellidor Holdings Limited's CEO Compensation With The Industry

Our data indicates that Trellidor Holdings Limited has a market capitalization of R157m, and total annual CEO compensation was reported as R4.1m for the year to June 2024. That's a fairly small increase of 5.9% over the previous year. We note that the salary portion, which stands at R3.42m constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the South Africa Building industry with market capitalizations below R3.6b, we found that the median total CEO compensation was R2.6m. This suggests that Terry Dennison is paid more than the median for the industry. Moreover, Terry Dennison also holds R15m worth of Trellidor Holdings 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	R3.4m	R3.3m	83%
Other	R700k	R603k	17%
Total Compensation	R4.1m	R3.9m	100%

Speaking on an industry level, nearly 51% of total compensation represents salary, while the remainder of 49% is other remuneration. According to our research, Trellidor Holdings has allocated a higher percentage of pay to salary in comparison to the wider industry. 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.

Trellidor Holdings Limited's Growth

Over the last three years, Trellidor Holdings Limited has shrunk its earnings per share by 3.9% per year. It achieved revenue growth of 13% over the last year.

The decline in EPS is a bit concerning. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Trellidor Holdings Limited Been A Good Investment?

Few Trellidor Holdings Limited shareholders would feel satisfied with the return of -50% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 4 warning signs for Trellidor Holdings you should be aware of, and 2 of them can't be ignored.

Switching gears from Trellidor 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.