Why We Think Shareholders May Be Considering Bumping Up Remgro Limited's (JSE:REM) CEO Compensation

Key Insights

• Remgro to hold its Annual General Meeting on 4th of December
• Total pay for CEO Jannie Durand includes R12.8m salary
• The total compensation is 79% less than the average for the industry
• Remgro's total shareholder return over the past three years was 66% while its EPS grew by 84% over the past three years

Shareholders will be pleased by the impressive results for Remgro Limited (JSE:REM) recently and CEO Jannie Durand has played a key role. At the upcoming AGM on 4th of December, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

See our latest analysis for Remgro

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

Our data indicates that Remgro Limited has a market capitalization of R81b, and total annual CEO compensation was reported as R16m for the year to June 2023. That's just a smallish increase of 5.9% on last year. In particular, the salary of R12.8m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the South Africa Diversified Financial industry with market capitalizations ranging from R37b to R120b, the reported median CEO total compensation was R77m. In other words, Remgro pays its CEO lower than the industry median. What's more, Jannie Durand holds R132m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	R13m	R12m	79%
Other	R3.5m	R3.3m	21%
Total Compensation	R16m	R15m	100%

Talking in terms of the industry, salary represented approximately 30% of total compensation out of all the companies we analyzed, while other remuneration made up 70% of the pie. It's interesting to note that Remgro pays out a greater portion of remuneration through salary, compared to the industry. 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.

Remgro Limited's Growth

Over the past three years, Remgro Limited has seen its earnings per share (EPS) grow by 84% per year. Its revenue is up 15% over the last year.

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. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Remgro Limited Been A Good Investment?

We think that the total shareholder return of 66%, over three years, would leave most Remgro 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 in a relatively good performance, the CEO remuneration policy may not be the focus at 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.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Remgro that investors should think about before committing capital to this stock.

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.