The Compensation For Dipula Income Fund Limited's (JSE:DIB) CEO Looks Deserved And Here's Why

We have been pretty impressed with the performance at Dipula Income Fund Limited (JSE:DIB) recently and CEO Izak Petersen deserves a mention for their role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 22 February 2023. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

See our latest analysis for Dipula Income Fund

How Does Total Compensation For Izak Petersen Compare With Other Companies In The Industry?

Our data indicates that Dipula Income Fund Limited has a market capitalization of R3.7b, and total annual CEO compensation was reported as R8.6m for the year to August 2022. That's a fairly small increase of 7.1% over the previous year. We note that the salary portion, which stands at R5.18m constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the South African REITs industry with market capitalizations between R1.8b and R7.2b, we discovered that the median CEO total compensation of that group was R8.0m. This suggests that Dipula Income Fund remunerates its CEO largely in line with the industry average. Furthermore, Izak Petersen directly owns R139m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	R5.2m	R4.9m	60%
Other	R3.4m	R3.2m	40%
Total Compensation	R8.6m	R8.1m	100%

On an industry level, around 49% of total compensation represents salary and 51% is other remuneration. Dipula Income Fund pays out 60% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Dipula Income Fund Limited's Growth Numbers

Dipula Income Fund Limited has seen its funds from operations (FFO) increase by 18% over the past one year. Its revenue is up 2.9% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Dipula Income Fund Limited Been A Good Investment?

Boasting a total shareholder return of 179% over three years, Dipula Income Fund 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...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 4 warning signs for Dipula Income Fund you should be aware of, and 2 of them are a bit unpleasant.

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.

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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.