It's Unlikely That Nu-World Holdings Limited's (JSE:NWL) CEO Will See A Huge Pay Rise This Year

Key Insights

• Nu-World Holdings to hold its Annual General Meeting on 12th of February
• Salary of R5.57m is part of CEO Jeffrey Goldberg's total remuneration
• The overall pay is 83% above the industry average
• Nu-World Holdings' total shareholder return over the past three years was 3.3% while its EPS was down 18% over the past three years

The anaemic share price growth at Nu-World Holdings Limited (JSE:NWL) over the past few years has probably not impressed shareholders and may be due to earnings not growing over that period. Some of these issues will occupy shareholders' minds as the AGM rolls around on 12th of February. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

Check out our latest analysis for Nu-World Holdings

How Does Total Compensation For Jeffrey Goldberg Compare With Other Companies In The Industry?

According to our data, Nu-World Holdings Limited has a market capitalization of R570m, and paid its CEO total annual compensation worth R6.3m over the year to August 2024. This was the same amount the CEO received in the prior year. In particular, the salary of R5.57m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the South Africa Consumer Durables industry with market capitalizations below R3.7b, we found that the median total CEO compensation was R3.4m. Accordingly, our analysis reveals that Nu-World Holdings Limited pays Jeffrey Goldberg north of the industry median. Moreover, Jeffrey Goldberg also holds R31m worth of Nu-World 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	R5.6m	R5.6m	89%
Other	R717k	R717k	11%
Total Compensation	R6.3m	R6.3m	100%

Speaking on an industry level, nearly 61% of total compensation represents salary, while the remainder of 39% is other remuneration. Nu-World Holdings is paying a higher share of its remuneration through a salary in comparison to the overall 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.

A Look at Nu-World Holdings Limited's Growth Numbers

Nu-World Holdings Limited has reduced its earnings per share by 18% a year over the last three years. In the last year, its revenue is up 8.3%.

The decline in EPS is a bit concerning. The fairly low revenue growth fails to impress given that the EPS is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Nu-World Holdings Limited Been A Good Investment?

Nu-World Holdings Limited has generated a total shareholder return of 3.3% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

In Summary...

The lacklustre share price returns along with the lack of earnings growth makes us think that a strong rebound in the share price may be difficult. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Nu-World Holdings (1 is potentially serious!) that you should be aware of before investing here.

Important note: Nu-World Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.