Stock Analysis

Here's Why It's Unlikely That Sea Harvest Group Limited's (JSE:SHG) CEO Will See A Pay Rise This Year

JSE:SHG
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Key Insights

Shareholders will probably not be too impressed with the underwhelming results at Sea Harvest Group Limited (JSE:SHG) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 30th of May. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Sea Harvest Group

Comparing Sea Harvest Group Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Sea Harvest Group Limited has a market capitalization of R2.1b, and reported total annual CEO compensation of R15m for the year to December 2023. Notably, that's a decrease of 37% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at R6.1m.

On comparing similar-sized companies in the South African Food industry with market capitalizations below R3.7b, we found that the median total CEO compensation was R7.9m. This suggests that Felix Ratheb is paid more than the median for the industry. Moreover, Felix Ratheb also holds R27m 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.

Component20232022Proportion (2023)
Salary R6.1m R5.6m 40%
Other R9.1m R19m 60%
Total CompensationR15m R24m100%

On an industry level, roughly 46% of total compensation represents salary and 54% is other remuneration. Sea Harvest Group pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
JSE:SHG CEO Compensation May 24th 2024

A Look at Sea Harvest Group Limited's Growth Numbers

Sea Harvest Group Limited has reduced its earnings per share by 13% a year over the last three years. It achieved revenue growth of 5.6% over the last year.

Overall this is not a very positive result for shareholders. The fairly low revenue growth fails to impress given that the EPS is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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?

With a total shareholder return of -41% over three years, Sea Harvest Group Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 5 warning signs for Sea Harvest Group (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.