Stock Analysis

Aspen Pharmacare Holdings Limited's (JSE:APN) CEO Compensation Is Looking A Bit Stretched At The Moment

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Key Insights

CEO Stephen Saad has done a decent job of delivering relatively good performance at Aspen Pharmacare Holdings Limited (JSE:APN) recently. As shareholders go into the upcoming AGM on 7th of December, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Aspen Pharmacare Holdings

Comparing Aspen Pharmacare Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Aspen Pharmacare Holdings Limited has a market capitalization of R82b, and reported total annual CEO compensation of R24m for the year to June 2023. That's just a smallish increase of 3.4% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at R9.2m.

On examining similar-sized companies in the South Africa Pharmaceuticals industry with market capitalizations between R38b and R121b, we discovered that the median CEO total compensation of that group was R9.8m. Hence, we can conclude that Stephen Saad is remunerated higher than the industry median. What's more, Stephen Saad holds R11b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20232022Proportion (2023)
Salary R9.2m R8.7m 38%
Other R15m R15m 62%
Total CompensationR24m R23m100%

On an industry level, roughly 56% of total compensation represents salary and 44% is other remuneration. In Aspen Pharmacare Holdings' 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:APN CEO Compensation December 1st 2023

Aspen Pharmacare Holdings Limited's Growth

Aspen Pharmacare Holdings Limited has seen its earnings per share (EPS) increase by 17% a year over the past three years. Its revenue is up 5.4% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Aspen Pharmacare Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 57% over three years, Aspen Pharmacare Holdings Limited has done well by shareholders. 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.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Aspen Pharmacare Holdings.

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.