Alexander Forbes Group Holdings Limited's (JSE:AFH) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Alexander Forbes Group Holdings' Annual General Meeting to take place on 29th of August
• CEO Dawie de Villiers' total compensation includes salary of R6.27m
• Total compensation is 175% above industry average
• Over the past three years, Alexander Forbes Group Holdings' EPS grew by 14% and over the past three years, the total shareholder return was 132%

Performance at Alexander Forbes Group Holdings Limited (JSE:AFH) has been reasonably good and CEO Dawie de Villiers has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 29th of August, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Alexander Forbes Group Holdings

How Does Total Compensation For Dawie de Villiers Compare With Other Companies In The Industry?

According to our data, Alexander Forbes Group Holdings Limited has a market capitalization of R8.2b, and paid its CEO total annual compensation worth R36m over the year to March 2024. Notably, that's an increase of 90% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at R6.3m.

For comparison, other companies in the South Africa Capital Markets industry with market capitalizations ranging between R3.6b and R14b had a median total CEO compensation of R13m. Accordingly, our analysis reveals that Alexander Forbes Group Holdings Limited pays Dawie de Villiers north of the industry median. Furthermore, Dawie de Villiers directly owns R23m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	R6.3m	R6.0m	17%
Other	R30m	R13m	83%
Total Compensation	R36m	R19m	100%

On an industry level, around 59% of total compensation represents salary and 41% is other remuneration. It's interesting to note that Alexander Forbes Group Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Alexander Forbes Group Holdings Limited's Growth Numbers

Alexander Forbes Group Holdings Limited's earnings per share (EPS) grew 14% per year over the last three years. In the last year, its revenue is up 13%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 Alexander Forbes Group Holdings Limited Been A Good Investment?

We think that the total shareholder return of 132%, over three years, would leave most Alexander Forbes Group Holdings Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

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.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Alexander Forbes Group Holdings that you should be aware of before investing.

Switching gears from Alexander Forbes Group Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.