Shareholders May Be More Conservative With Primeserv Group Limited's (JSE:PMV) CEO Compensation For Now

Key Insights

• Primeserv Group to hold its Annual General Meeting on 22nd of November
• Salary of R4.43m is part of CEO Merrick Abel's total remuneration
• The overall pay is 82% above the industry average
• Primeserv Group's total shareholder return over the past three years was 155% while its EPS grew by 46% over the past three years

Under the guidance of CEO Merrick Abel, Primeserv Group Limited (JSE:PMV) has performed reasonably well recently. As shareholders go into the upcoming AGM on 22nd of November, 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.

See our latest analysis for Primeserv Group

How Does Total Compensation For Merrick Abel Compare With Other Companies In The Industry?

According to our data, Primeserv Group Limited has a market capitalization of R172m, and paid its CEO total annual compensation worth R7.9m over the year to March 2024. Notably, that's an increase of 24% over the year before. We note that the salary of R4.43m makes up a sizeable portion of the total compensation received by the CEO.

On comparing similar-sized companies in the South Africa Professional Services industry with market capitalizations below R3.6b, we found that the median total CEO compensation was R4.3m. Hence, we can conclude that Merrick Abel is remunerated higher than the industry median. What's more, Merrick Abel holds R50m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	R4.4m	R4.4m	56%
Other	R3.5m	R2.0m	44%
Total Compensation	R7.9m	R6.4m	100%

On an industry level, around 59% of total compensation represents salary and 41% is other remuneration. Although there is a difference in how total compensation is set, Primeserv Group more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Primeserv Group Limited's Growth Numbers

Over the past three years, Primeserv Group Limited has seen its earnings per share (EPS) grow by 46% per year. In the last year, its revenue is up 18%.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, 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 Primeserv Group Limited Been A Good Investment?

Most shareholders would probably be pleased with Primeserv Group Limited for providing a total return of 155% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar 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. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

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. We identified 4 warning signs for Primeserv Group (2 are potentially serious!) that you should be aware of before investing here.

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.

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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.