How Much Is Primeserv Group Limited (JSE:PMV) CEO Getting Paid?

The CEO of Primeserv Group Limited (JSE:PMV) is Merrick Abel, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Primeserv Group

Comparing Primeserv Group Limited's CEO Compensation With the industry

Our data indicates that Primeserv Group Limited has a market capitalization of R77m, and total annual CEO compensation was reported as R7.9m for the year to March 2020. Notably, that's an increase of 32% over the year before. Notably, the salary which is R4.46m, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below R3.0b, we found that the median total CEO compensation was R4.6m. Hence, we can conclude that Merrick Abel is remunerated higher than the industry median. Moreover, Merrick Abel also holds R19m worth of Primeserv Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 56% of total compensation out of all the companies we analyzed, while other remuneration made up 44% of the pie. There isn't a significant difference between Primeserv Group and the broader market, in terms of salary allocation in the overall compensation package. 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.

A Look at Primeserv Group Limited's Growth Numbers

Primeserv Group Limited has seen its earnings per share (EPS) increase by 9.1% a year over the past three years. Its revenue is down 11% over the previous year.

We would prefer it if there was revenue growth, but the modest EPSgrowth gives us some relief. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Primeserv Group Limited Been A Good Investment?

We think that the total shareholder return of 75%, over three years, would leave most Primeserv Group Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

As previously discussed, Merrick is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Importantly though, shareholder returns for the last three years have been excellent. Albeit, EPS growth has not been as impressive over the same time frame. So, although we would've liked to see stronger EPS growth, positive investor returns lead us to believe CEO compensation is reasonable.

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. That's why we did our research, and identified 3 warning signs for Primeserv Group (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

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.

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This article by Simply Wall St is general in nature. 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.
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