Here's Why We Think AfroCentric Investment Corporation Limited's (JSE:ACT) CEO Compensation Looks Fair for the time being

Performance at AfroCentric Investment Corporation Limited (JSE:ACT) has been reasonably good and CEO Ahmed Banderker has done a decent job of steering the company in the right direction. 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 10 November 2022. We present our case of why we think CEO compensation looks fair.

Check out our latest analysis for AfroCentric Investment

Comparing AfroCentric Investment Corporation Limited's CEO Compensation With The Industry

According to our data, AfroCentric Investment Corporation Limited has a market capitalization of R2.9b, and paid its CEO total annual compensation worth R8.2m over the year to June 2022. Notably, that's a decrease of 12% over the year before. We note that the salary portion, which stands at R5.22m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations ranging from R1.8b to R7.4b, the reported median CEO total compensation was R11m. This suggests that AfroCentric Investment remunerates its CEO largely in line with the industry average. Moreover, Ahmed Banderker also holds R2.6m worth of AfroCentric Investment stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2022	2021	Proportion (2022)
Salary	R5.2m	R4.9m	63%
Other	R3.0m	R4.5m	37%
Total Compensation	R8.2m	R9.4m	100%

On an industry level, around 63% of total compensation represents salary and 37% is other remuneration. Although there is a difference in how total compensation is set, AfroCentric Investment 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.

AfroCentric Investment Corporation Limited's Growth

Over the past three years, AfroCentric Investment Corporation Limited has seen its earnings per share (EPS) grow by 4.4% per year. Its revenue is up 8.0% over the last year.

We'd prefer higher revenue growth, but we're happy with the modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has AfroCentric Investment Corporation Limited Been A Good Investment?

We think that the total shareholder return of 83%, over three years, would leave most AfroCentric Investment Corporation 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...

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. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

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 AfroCentric Investment that you should be aware of before investing.

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. 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.