This Is The Reason Why We Think African Media Entertainment Limited's (JSE:AME) CEO Might Be Underpaid

Key Insights

• African Media Entertainment's Annual General Meeting to take place on 29th of August
• Salary of R2.69m is part of CEO Dave Tiltmann's total remuneration
• Total compensation is 35% below industry average
• Over the past three years, African Media Entertainment's EPS grew by 508% and over the past three years, the total shareholder return was 105%

The solid performance at African Media Entertainment Limited (JSE:AME) has been impressive and shareholders will probably be pleased to know that CEO Dave Tiltmann has delivered. At the upcoming AGM on 29th of August, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

Check out our latest analysis for African Media Entertainment

How Does Total Compensation For Dave Tiltmann Compare With Other Companies In The Industry?

At the time of writing, our data shows that African Media Entertainment Limited has a market capitalization of R284m, and reported total annual CEO compensation of R3.3m for the year to March 2024. We note that's an increase of 10% above last year. Notably, the salary which is R2.69m, represents most of the total compensation being paid.

In comparison with other companies in the South Africa Media industry with market capitalizations under R3.6b, the reported median total CEO compensation was R5.1m. Accordingly, African Media Entertainment pays its CEO under the industry median.

Component	2024	2023	Proportion (2024)
Salary	R2.7m	R2.5m	81%
Other	R630k	R500k	19%
Total Compensation	R3.3m	R3.0m	100%

Talking in terms of the industry, salary represented approximately 81% of total compensation out of all the companies we analyzed, while other remuneration made up 19% of the pie. Although there is a difference in how total compensation is set, African Media Entertainment more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

African Media Entertainment Limited's Growth

African Media Entertainment Limited has seen its earnings per share (EPS) increase by 508% a year over the past three years. It achieved revenue growth of 8.0% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has African Media Entertainment Limited Been A Good Investment?

Most shareholders would probably be pleased with African Media Entertainment Limited for providing a total return of 105% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for African Media Entertainment (2 don't sit too well with us!) that you should be aware of before investing here.

Important note: African Media Entertainment 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. 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.