Does Sea Harvest Group's (JSE:SHG) CEO Salary Compare Well With Industry Peers?

This article will reflect on the compensation paid to Felix Ratheb who has served as CEO of Sea Harvest Group Limited (JSE:SHG) since 2013. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Sea Harvest Group

How Does Total Compensation For Felix Ratheb Compare With Other Companies In The Industry?

Our data indicates that Sea Harvest Group Limited has a market capitalization of R3.6b, and total annual CEO compensation was reported as R12m for the year to December 2019. That's a modest increase of 6.3% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at R4.2m.

On examining similar-sized companies in the industry with market capitalizations between R1.5b and R6.2b, we discovered that the median CEO total compensation of that group was R8.9m. This suggests that Felix Ratheb is paid more than the median for the industry. Moreover, Felix Ratheb also holds R20m worth of Sea Harvest Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 56% of total compensation represents salary and 44% is other remuneration. It's interesting to note that Sea Harvest Group allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Sea Harvest Group Limited's Growth

Sea Harvest Group Limited's earnings per share (EPS) grew 5.1% per year over the last three years. In the last year, its revenue is up 19%.

We think the revenue growth is good. And the improvement in EPSis modest but respectable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. 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 Sea Harvest Group Limited Been A Good Investment?

Sea Harvest Group Limited has generated a total shareholder return of 8.8% over three years, so most shareholders wouldn't be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

As we touched on above, Sea Harvest Group Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But the company lacks EPS growth, and returns to shareholders are less than stellar, over the last three years. So while shareholders might not be overly concerned about CEO compensation, we suspect most would prefer to see improved performance, before thinking a bump in pay is in order.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for Sea Harvest Group that you should be aware of before investing.

Important note: Sea Harvest Group 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. 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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