What Can We Make Of Sibanye Stillwater's (JSE:SSW) CEO Compensation?

Simply Wall St
September 25, 2020

This article will reflect on the compensation paid to Neal Froneman who has served as CEO of Sibanye Stillwater Limited (JSE:SSW) since 2013. This analysis will also assess whether Sibanye Stillwater pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Sibanye Stillwater

Comparing Sibanye Stillwater Limited's CEO Compensation With the industry

At the time of writing, our data shows that Sibanye Stillwater Limited has a market capitalization of R127b, and reported total annual CEO compensation of R32m for the year to December 2019. Notably, that's a decrease of 11% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at R13m.

For comparison, other companies in the same industry with market capitalizations ranging between R68b and R203b had a median total CEO compensation of R38m. From this we gather that Neal Froneman is paid around the median for CEOs in the industry. Moreover, Neal Froneman also holds R164m worth of Sibanye Stillwater stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20192018Proportion (2019)
Salary R13m R12m 39%
Other R19m R24m 61%
Total CompensationR32m R36m100%

Speaking on an industry level, nearly 49% of total compensation represents salary, while the remainder of 51% is other remuneration. In Sibanye Stillwater's case, non-salary compensation represents a greater slice of total remuneration, 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.

JSE:SSW CEO Compensation September 25th 2020

A Look at Sibanye Stillwater Limited's Growth Numbers

Sibanye Stillwater Limited has seen its earnings per share (EPS) increase by 92% a year over the past three years. It achieved revenue growth of 107% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Sibanye Stillwater Limited Been A Good Investment?

Boasting a total shareholder return of 233% over three years, Sibanye Stillwater Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

As we noted earlier, Sibanye Stillwater pays its CEO in line with similar-sized companies belonging to the same industry. The company is growing EPS and total shareholder returns have been pleasing. Indeed, many might consider that Neal is compensated rather modestly, given the solid company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Sibanye Stillwater that you should be aware of before investing.

Switching gears from Sibanye Stillwater, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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