Here's Why Shareholders May Want To Be Cautious With Increasing JSE Limited's (JSE:JSE) CEO Pay Packet

Key Insights

• JSE to hold its Annual General Meeting on 14th of May
• CEO Leila Fourie's total compensation includes salary of R7.95m
• The overall pay is 116% above the industry average
• JSE's total shareholder return over the past three years was 52% while its EPS grew by 8.9% over the past three years

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CEO Leila Fourie has done a decent job of delivering relatively good performance at JSE Limited (JSE:JSE) recently. As shareholders go into the upcoming AGM on 14th of May, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for JSE

Comparing JSE Limited's CEO Compensation With The Industry

Our data indicates that JSE Limited has a market capitalization of R10b, and total annual CEO compensation was reported as R26m for the year to December 2024. We note that's an increase of 17% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at R7.9m.

In comparison with other companies in the South Africa Capital Markets industry with market capitalizations ranging from R3.7b to R15b, the reported median CEO total compensation was R12m. This suggests that Leila Fourie is paid more than the median for the industry. What's more, Leila Fourie holds R74m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 51% of total compensation represents salary, while the remainder of 49% is other remuneration. In JSE's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at JSE Limited's Growth Numbers

JSE Limited's earnings per share (EPS) grew 8.9% per year over the last three years. In the last year, its revenue is up 6.1%.

We would argue that the improvement in revenue is good, but isn't particularly impressive, 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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has JSE Limited Been A Good Investment?

We think that the total shareholder return of 52%, over three years, would leave most JSE 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...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

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 1 warning sign for JSE that investors should be aware of in a dynamic business environment.

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.