Increases to CEO Compensation Might Be Put On Hold For Now at Spur Corporation Ltd (JSE:SUR)

Key Insights

• Spur's Annual General Meeting to take place on 5th of December
• Salary of R5.96m is part of CEO Val Nichas's total remuneration
• Total compensation is 53% above industry average
• Spur's total shareholder return over the past three years was 117% while its EPS grew by 38% over the past three years

CEO Val Nichas has done a decent job of delivering relatively good performance at Spur Corporation Ltd (JSE:SUR) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 5th of December. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Spur

How Does Total Compensation For Val Nichas Compare With Other Companies In The Industry?

At the time of writing, our data shows that Spur Corporation Ltd has a market capitalization of R2.9b, and reported total annual CEO compensation of R16m for the year to June 2024. That's just a smallish increase of 5.4% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at R6.0m.

On examining similar-sized companies in the South Africa Hospitality industry with market capitalizations between R1.8b and R7.2b, we discovered that the median CEO total compensation of that group was R10m. Accordingly, our analysis reveals that Spur Corporation Ltd pays Val Nichas north of the industry median.

Component	2024	2023	Proportion (2024)
Salary	R6.0m	R5.6m	38%
Other	R9.7m	R9.2m	62%
Total Compensation	R16m	R15m	100%

On an industry level, around 38% of total compensation represents salary and 62% is other remuneration. Although there is a difference in how total compensation is set, Spur more or less reflects the market in terms of setting the salary. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Spur Corporation Ltd's Growth

Over the past three years, Spur Corporation Ltd has seen its earnings per share (EPS) grow by 38% per year. It achieved revenue growth of 14% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. 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 Spur Corporation Ltd Been A Good Investment?

Most shareholders would probably be pleased with Spur Corporation Ltd for providing a total return of 117% 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...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Spur 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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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.