Stock Analysis

Here's Why Putprop Limited's (JSE:PPR) CEO Might See A Pay Rise Soon

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Key Insights

  • Putprop will host its Annual General Meeting on 8th of November
  • CEO Bruno Carleo's total compensation includes salary of R1.51m
  • Total compensation is 40% below industry average
  • Putprop's EPS grew by 59% over the past three years while total shareholder return over the past three years was 4.3%

Shareholders will probably not be disappointed by the robust results at Putprop Limited (JSE:PPR) recently and they will be keeping this in mind as they go into the AGM on 8th of November. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.

View our latest analysis for Putprop

How Does Total Compensation For Bruno Carleo Compare With Other Companies In The Industry?

Our data indicates that Putprop Limited has a market capitalization of R139m, and total annual CEO compensation was reported as R1.9m for the year to June 2023. That's a modest increase of 4.6% on the prior year. We note that the salary portion, which stands at R1.51m constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the South Africa Real Estate industry with market capitalizations below R3.7b, we found that the median total CEO compensation was R3.2m. This suggests that Bruno Carleo is paid below the industry median. What's more, Bruno Carleo holds R7.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20232022Proportion (2023)
Salary R1.5m R1.4m 77%
Other R439k R434k 23%
Total CompensationR1.9m R1.9m100%

Speaking on an industry level, nearly 68% of total compensation represents salary, while the remainder of 32% is other remuneration. It's interesting to note that Putprop pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

JSE:PPR CEO Compensation November 2nd 2023

A Look at Putprop Limited's Growth Numbers

Over the past three years, Putprop Limited has seen its earnings per share (EPS) grow by 59% per year. It achieved revenue growth of 8.5% 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Putprop Limited Been A Good Investment?

Putprop Limited has generated a total shareholder return of 4.3% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

In Summary...

The company's overall performance, while not bad, could be better. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. Rather, investors would more likely want to engage on discussions related to 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 did our research and identified 4 warning signs (and 2 which are a bit concerning) in Putprop we think you should know about.

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.

Valuation is complex, but we're helping make it simple.

Find out whether Putprop is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.