This Is Why We Think Remgro Limited's (JSE:REM) CEO Might Get A Pay Rise Approved By Shareholders

Shareholders will be pleased by the robust performance of Remgro Limited (JSE:REM) recently and this will be kept in mind in the upcoming AGM on 30 November 2022. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.

Check out the opportunities and risks within the ZA Diversified Financial industry.

How Does Total Compensation For Jannie Durand Compare With Other Companies In The Industry?

According to our data, Remgro Limited has a market capitalization of R80b, and paid its CEO total annual compensation worth R15m over the year to June 2022. That's a modest increase of 4.0% on the prior year. In particular, the salary of R12.1m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations ranging from R34b to R109b, the reported median CEO total compensation was R28m. In other words, Remgro pays its CEO lower than the industry median. Moreover, Jannie Durand also holds R121m worth of Remgro stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2022	2021	Proportion (2022)
Salary	R12m	R12m	79%
Other	R3.3m	R3.2m	21%
Total Compensation	R15m	R15m	100%

On an industry level, roughly 63% of total compensation represents salary and 37% is other remuneration. Remgro is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Remgro Limited's Growth Numbers

Over the past three years, Remgro Limited has seen its earnings per share (EPS) grow by 116% per year. In the last year, its revenue is up 16%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Remgro Limited Been A Good Investment?

With a total shareholder return of 5.9% over three years, Remgro Limited has done okay by shareholders, but there's always room for improvement. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

To Conclude...

While the company seems to be headed in the right direction performance-wise, there's always room for improvement. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. Rather, investors would more likely want to engage on discussions related to key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Remgro that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.