FirstRand Limited's (JSE:FSR) CEO Will Probably Have Their Compensation Approved By Shareholders

Key Insights

• FirstRand will host its Annual General Meeting on 30th of November
• Salary of R9.64m is part of CEO Alan Pullinger's total remuneration
• The overall pay is comparable to the industry average
• FirstRand's total shareholder return over the past three years was 67% while its EPS grew by 29% over the past three years

It would be hard to discount the role that CEO Alan Pullinger has played in delivering the impressive results at FirstRand Limited (JSE:FSR) recently. Coming up to the next AGM on 30th of November, shareholders would be keeping this in mind. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is not extravagant.

See our latest analysis for FirstRand

How Does Total Compensation For Alan Pullinger Compare With Other Companies In The Industry?

According to our data, FirstRand Limited has a market capitalization of R375b, and paid its CEO total annual compensation worth R51m over the year to June 2023. That's a modest increase of 6.6% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at R9.6m.

On comparing similar companies in the South Africa Diversified Financial industry with market capitalizations above R150b, we found that the median total CEO compensation was R59m. So it looks like FirstRand compensates Alan Pullinger in line with the median for the industry. Furthermore, Alan Pullinger directly owns R467m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	R9.6m	R9.1m	19%
Other	R42m	R39m	81%
Total Compensation	R51m	R48m	100%

On an industry level, roughly 30% of total compensation represents salary and 70% is other remuneration. FirstRand sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

FirstRand Limited's Growth

FirstRand Limited has seen its earnings per share (EPS) increase by 29% a year over the past three years. In the last year, its revenue is up 12%.

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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has FirstRand Limited Been A Good Investment?

Most shareholders would probably be pleased with FirstRand Limited for providing a total return of 67% over three years. 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.

In Summary...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for FirstRand 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.