Shareholders May Not Be So Generous With Sea Harvest Group Limited's (JSE:SHG) CEO Compensation And Here's Why

CEO Felix Ratheb has done a decent job of delivering relatively good performance at Sea Harvest Group Limited (JSE:SHG) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 26 May 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Sea Harvest Group

Comparing Sea Harvest Group Limited's CEO Compensation With the industry

Our data indicates that Sea Harvest Group Limited has a market capitalization of R4.1b, and total annual CEO compensation was reported as R18m for the year to December 2020. Notably, that's an increase of 51% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at R5.1m.

On comparing similar companies from the same industry with market caps ranging from R1.4b to R5.6b, we found that the median CEO total compensation was R9.4m. Accordingly, our analysis reveals that Sea Harvest Group Limited pays Felix Ratheb north of the industry median. Moreover, Felix Ratheb also holds R29m 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.

Component	2020	2019	Proportion (2020)
Salary	R5.1m	R4.2m	28%
Other	R13m	R7.9m	72%
Total Compensation	R18m	R12m	100%

On an industry level, around 65% of total compensation represents salary and 35% 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.

A Look at Sea Harvest Group Limited's Growth Numbers

Sea Harvest Group Limited has seen its earnings per share (EPS) increase by 9.0% a year over the past three years. Its revenue is up 10% over the last year.

We think the revenue growth is good. And the modest growth in EPS isn't bad, either. So while performance isn't amazing, we think it really does seem quite respectable. 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 32% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Sea Harvest Group that investors should be aware of in a dynamic business environment.

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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