We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Brimstone Investment Corporation Limited's (JSE:BRT) CEO For Now

Key Insights

• Brimstone Investment to hold its Annual General Meeting on 27th of May
• CEO Mustaq Enus-Brey's total compensation includes salary of R3.97m
• The overall pay is 31% above the industry average
• Brimstone Investment's EPS grew by 17% over the past three years while total shareholder loss over the past three years was 20%

The underwhelming share price performance of Brimstone Investment Corporation Limited (JSE:BRT) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 27th of May could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Brimstone Investment

Comparing Brimstone Investment Corporation Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Brimstone Investment Corporation Limited has a market capitalization of R1.1b, and reported total annual CEO compensation of R10m for the year to December 2023. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at R4.0m.

For comparison, other companies in the South African Food industry with market capitalizations below R3.6b, reported a median total CEO compensation of R7.9m. Hence, we can conclude that Mustaq Enus-Brey is remunerated higher than the industry median. Moreover, Mustaq Enus-Brey also holds R123m worth of Brimstone Investment stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	R4.0m	R3.8m	39%
Other	R6.3m	R6.2m	61%
Total Compensation	R10m	R10m	100%

On an industry level, around 46% of total compensation represents salary and 54% is other remuneration. It's interesting to note that Brimstone Investment allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Brimstone Investment Corporation Limited's Growth Numbers

Brimstone Investment Corporation Limited has seen its earnings per share (EPS) increase by 17% a year over the past three years. It achieved revenue growth of 5.1% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Brimstone Investment Corporation Limited Been A Good Investment?

Since shareholders would have lost about 20% over three years, some Brimstone Investment Corporation Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 4 warning signs for Brimstone Investment (of which 2 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the 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.