The CEO of Distell Group Holdings Limited (JSE:DGH) is Richard Rushton, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Distell Group Holdings
How Does Total Compensation For Richard Rushton Compare With Other Companies In The Industry?
Our data indicates that Distell Group Holdings Limited has a market capitalization of R21b, and total annual CEO compensation was reported as R13m for the year to June 2020. Notably, that's an increase of 35% over the year before. We note that the salary portion, which stands at R6.98m constitutes the majority of total compensation received by the CEO.
On examining similar-sized companies in the industry with market capitalizations between R15b and R49b, we discovered that the median CEO total compensation of that group was R17m. From this we gather that Richard Rushton is paid around the median for CEOs in the industry.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | R7.0m | R7.1m | 52% |
| Other | R6.3m | R2.7m | 48% |
| Total Compensation | R13m | R9.8m | 100% |
Speaking on an industry level, nearly 58% of total compensation represents salary, while the remainder of 42% is other remuneration. Distell Group Holdings is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Distell Group Holdings Limited's Growth
Over the last three years, Distell Group Holdings Limited has shrunk its earnings per share by 42% per year. Its revenue is down 16% over the previous year.
The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Distell Group Holdings Limited Been A Good Investment?
Given the total shareholder loss of 26% over three years, many shareholders in Distell Group Holdings Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
In Summary...
As we touched on above, Distell Group Holdings Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, EPS growth and total shareholder return have been negative for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
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 Distell Group Holdings (of which 1 is concerning!) 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. 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.
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About JSE:DGH
Distell Group Holdings
Distell Group Holdings Limited, an investment holding company, engages in the production, marketing, and distribution of wines, spirits, ciders, and ready-to-drink (RTD) beverages South Africa, rest of Africa, and internationally.
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