Some Shareholders May Object To A Pay Rise For AH-Vest Limited's (JSE:AHL) CEO This Year

Key Insights

• AH-Vest will host its Annual General Meeting on 24th of January
• Total pay for CEO Muhammed Naasif Darsot includes R922.3k salary
• The total compensation is 65% less than the average for the industry
• AH-Vest's three-year loss to shareholders was 67% while its EPS was down 44% over the past three years

Performance at AH-Vest Limited (JSE:AHL) has not been particularly rosy recently and shareholders will likely be holding CEO Muhammed Naasif Darsot and the board accountable for this. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 24th of January. From our analysis below, we think CEO compensation looks appropriate for now.

View our latest analysis for AH-Vest

How Does Total Compensation For Muhammed Naasif Darsot Compare With Other Companies In The Industry?

Our data indicates that AH-Vest Limited has a market capitalization of R16m, and total annual CEO compensation was reported as R2.0m for the year to June 2023. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at R922k.

In comparison with other companies in the South African Food industry with market capitalizations under R3.8b, the reported median total CEO compensation was R5.8m. Accordingly, AH-Vest pays its CEO under the industry median.

Component	2023	2022	Proportion (2023)
Salary	R922k	R918k	46%
Other	R1.1m	R1.1m	54%
Total Compensation	R2.0m	R2.0m	100%

Talking in terms of the industry, salary represented approximately 46% of total compensation out of all the companies we analyzed, while other remuneration made up 54% of the pie. AH-Vest is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

AH-Vest Limited's Growth

Over the last three years, AH-Vest Limited has shrunk its earnings per share by 44% per year. It achieved revenue growth of 2.5% over the last year.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has AH-Vest Limited Been A Good Investment?

With a total shareholder return of -67% over three years, AH-Vest Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for AH-Vest you should be aware of, and 2 of them can't be ignored.

Important note: AH-Vest is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.