The CEO of Nu-World Holdings Limited (JSE:NWL) is Jeffrey Goldberg, 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 Nu-World Holdings
How Does Total Compensation For Jeffrey Goldberg Compare With Other Companies In The Industry?
Our data indicates that Nu-World Holdings Limited has a market capitalization of R602m, and total annual CEO compensation was reported as R6.6m for the year to August 2020. We note that's a small decrease of 5.4% on last year. In particular, the salary of R5.83m, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under R2.9b, the reported median total CEO compensation was R3.1m. Accordingly, our analysis reveals that Nu-World Holdings Limited pays Jeffrey Goldberg north of the industry median. Moreover, Jeffrey Goldberg also holds R34m 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 | 2020 | 2019 | Proportion (2020) |
| Salary | R5.8m | R6.2m | 89% |
| Other | R725k | R769k | 11% |
| Total Compensation | R6.6m | R6.9m | 100% |
On an industry level, around 59% of total compensation represents salary and 41% is other remuneration. It's interesting to note that Nu-World Holdings pays out a greater portion of remuneration through salary, compared to the 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 7.5% a year over the last three years. Its revenue is down 13% over the previous year.
Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Nu-World Holdings Limited Been A Good Investment?
Given the total shareholder loss of 5.1% over three years, many shareholders in Nu-World Holdings Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
As previously discussed, Jeffrey is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. What's equally worrying is that the company isn't growing by our analysis. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Nu-World Holdings that investors should think about before committing capital to this stock.
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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About JSE:NWL
Nu-World Holdings
Manufactures, imports, distributes, and exports various consumer electronics, electrical appliances, and consumer durables in South Africa, Brazil, Hong Kong, Australia, and the United Arab Emirates.
Flawless balance sheet second-rate dividend payer.
