It Looks Like The CEO Of Santam Ltd (JSE:SNT) May Be Underpaid Compared To Peers

Key Insights

• Santam to hold its Annual General Meeting on 30th of May
• Salary of R8.00m is part of CEO Tava Madzinga's total remuneration
• Total compensation is 57% below industry average
• Over the past three years, Santam's EPS grew by 11% and over the past three years, the total shareholder return was 77%

We've discovered 1 warning sign about Santam. View them for free.

The impressive results at Santam Ltd (JSE:SNT) recently will be great news for shareholders. This would be kept in mind at the upcoming AGM on 30th of May which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.

Check out our latest analysis for Santam

Comparing Santam Ltd's CEO Compensation With The Industry

According to our data, Santam Ltd has a market capitalization of R46b, and paid its CEO total annual compensation worth R23m over the year to December 2024. That's a notable increase of 35% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at R8.0m.

On examining similar-sized companies in the South Africa Insurance industry with market capitalizations between R36b and R114b, we discovered that the median CEO total compensation of that group was R54m. This suggests that Tava Madzinga is paid below the industry median. Moreover, Tava Madzinga also holds R30m worth of Santam stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	R8.0m	R7.5m	34%
Other	R15m	R9.9m	66%
Total Compensation	R23m	R17m	100%

Speaking on an industry level, nearly 34% of total compensation represents salary, while the remainder of 66% is other remuneration. There isn't a significant difference between Santam and the broader market, in terms of salary allocation in the overall compensation package. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Santam Ltd's Growth Numbers

Santam Ltd's earnings per share (EPS) grew 11% per year over the last three years. It achieved revenue growth of 12% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Santam Ltd Been A Good Investment?

Boasting a total shareholder return of 77% over three years, Santam Ltd has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

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 1 warning sign for Santam that you should be aware of before investing.

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.