Shareholders Will Probably Hold Off On Increasing Deneb Investments Limited's (JSE:DNB) CEO Compensation For The Time Being

Key Insights

• Deneb Investments will host its Annual General Meeting on 25th of August
• CEO Stuart Queen's total compensation includes salary of R5.81m
• The total compensation is 881% higher than the average for the industry
• Deneb Investments' total shareholder return over the past three years was 21% while its EPS was down 3.0% over the past three years

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The share price of Deneb Investments Limited (JSE:DNB) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. The upcoming AGM on 25th of August may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

Check out our latest analysis for Deneb Investments

Comparing Deneb Investments Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Deneb Investments Limited has a market capitalization of R994m, and reported total annual CEO compensation of R11m for the year to March 2025. Notably, that's a decrease of 30% over the year before. Notably, the salary which is R5.81m, represents a considerable chunk of the total compensation being paid.

On comparing similar-sized companies in the South Africa Diversified Financial industry with market capitalizations below R3.5b, we found that the median total CEO compensation was R1.1m. Accordingly, our analysis reveals that Deneb Investments Limited pays Stuart Queen north of the industry median. Furthermore, Stuart Queen directly owns R17m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 22% of total compensation represents salary, while the remainder of 78% is other remuneration. Deneb Investments pays out 55% of remuneration in the form of a salary, significantly higher than the industry average. 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 Deneb Investments Limited's Growth Numbers

Over the last three years, Deneb Investments Limited has shrunk its earnings per share by 3.0% per year. In the last year, its revenue is up 6.3%.

Its a bit disappointing to see that the company has failed to grow its EPS. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Deneb Investments Limited Been A Good Investment?

Deneb Investments Limited has generated a total shareholder return of 21% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. 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.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Deneb Investments that investors should be aware of in a dynamic business environment.

Important note: Deneb Investments 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.