Merafe Resources Limited's (JSE:MRF) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Merafe Resources will host its Annual General Meeting on 13th of May
• Total pay for CEO Zanele Matlala includes R6.08m salary
• The total compensation is 157% higher than the average for the industry
• Merafe Resources' total shareholder return over the past three years was 55% while its EPS was down 26% over the past three years

Our free stock report includes 3 warning signs investors should be aware of before investing in Merafe Resources. Read for free now.

Merafe Resources Limited (JSE:MRF) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 13th of May. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

See our latest analysis for Merafe Resources

Comparing Merafe Resources Limited's CEO Compensation With The Industry

Our data indicates that Merafe Resources Limited has a market capitalization of R2.9b, and total annual CEO compensation was reported as R23m for the year to December 2024. Notably, that's an increase of 23% 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 examining similar-sized companies in the South African Metals and Mining industry with market capitalizations between R1.8b and R7.3b, we discovered that the median CEO total compensation of that group was R8.8m. This suggests that Zanele Matlala is paid more than the median for the industry. Furthermore, Zanele Matlala directly owns R7.9m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	R6.1m	R5.7m	27%
Other	R16m	R13m	73%
Total Compensation	R23m	R18m	100%

Talking in terms of the industry, salary represented approximately 55% of total compensation out of all the companies we analyzed, while other remuneration made up 45% of the pie. Merafe Resources 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.

A Look at Merafe Resources Limited's Growth Numbers

Over the last three years, Merafe Resources Limited has shrunk its earnings per share by 26% per year. It saw its revenue drop 8.7% over the last year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Merafe Resources Limited Been A Good Investment?

We think that the total shareholder return of 55%, over three years, would leave most Merafe Resources Limited shareholders smiling. 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...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Merafe Resources that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.