Why Deneb Investments' (JSE:DNB) CEO Pay Matters

Stuart Queen is the CEO of Deneb Investments Limited (JSE:DNB), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether Deneb Investments pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Deneb Investments

Comparing Deneb Investments Limited's CEO Compensation With the industry

Our data indicates that Deneb Investments Limited has a market capitalization of R783m, and total annual CEO compensation was reported as R7.6m for the year to March 2020. That's a slightly lower by 3.8% over the previous year. Notably, the salary which is R4.67m, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below R3.0b, we found that the median total CEO compensation was R5.2m. This suggests that Stuart Queen is paid more than the median for the industry. Furthermore, Stuart Queen directly owns R7.5m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 62% of total compensation represents salary and 38% is other remuneration. Our data reveals that Deneb Investments allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Deneb Investments Limited's Growth

Over the last three years, Deneb Investments Limited has shrunk its earnings per share by 81% per year. It saw its revenue drop 18% over the last year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Deneb Investments Limited Been A Good Investment?

With a three year total loss of 11% for the shareholders, Deneb Investments Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we touched on above, Deneb Investments Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Deneb Investments (of which 2 are a bit unpleasant!) that you should know about in order to have a holistic understanding of the 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. 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.
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