Here's Why RFG Holdings Limited's (JSE:RFG) CEO Compensation Is The Least Of Shareholders' Concerns

Key Insights

• RFG Holdings will host its Annual General Meeting on 13th of March
• Total pay for CEO Pieter Hanekom includes R5.02m salary
• The overall pay is comparable to the industry average
• RFG Holdings' total shareholder return over the past three years was 30% while its EPS grew by 30% over the past three years

Under the guidance of CEO Pieter Hanekom, RFG Holdings Limited (JSE:RFG) has performed reasonably well recently. As shareholders go into the upcoming AGM on 13th of March, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

View our latest analysis for RFG Holdings

How Does Total Compensation For Pieter Hanekom Compare With Other Companies In The Industry?

At the time of writing, our data shows that RFG Holdings Limited has a market capitalization of R3.5b, and reported total annual CEO compensation of R11m for the year to October 2023. That's a fairly small increase of 3.4% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at R5.0m.

On comparing similar companies from the South African Food industry with market caps ranging from R1.9b to R7.5b, we found that the median CEO total compensation was R11m. This suggests that RFG Holdings remunerates its CEO largely in line with the industry average.

Component	2023	2022	Proportion (2023)
Salary	R5.0m	R5.3m	47%
Other	R5.7m	R5.0m	53%
Total Compensation	R11m	R10m	100%

Speaking on an industry level, nearly 46% of total compensation represents salary, while the remainder of 54% is other remuneration. Although there is a difference in how total compensation is set, RFG Holdings more or less reflects the market in terms of setting the salary. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at RFG Holdings Limited's Growth Numbers

RFG Holdings Limited's earnings per share (EPS) grew 30% per year over the last three years. In the last year, its revenue is up 8.8%.

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. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has RFG Holdings Limited Been A Good Investment?

RFG Holdings Limited has served shareholders reasonably well, with a total return of 30% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

Whatever your view on compensation, you might want to check if insiders are buying or selling RFG Holdings shares (free trial).

Switching gears from RFG Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.