Here's Why Shareholders May Want To Be Cautious With Increasing Emira Property Fund Limited's (JSE:EMI) CEO Pay Packet

Key Insights

• Emira Property Fund to hold its Annual General Meeting on 3rd of September
• Salary of R4.97m is part of CEO Geoff Jennett's total remuneration
• The overall pay is 53% above the industry average
• Emira Property Fund's total shareholder return over the past three years was 68% while its EPS grew by 32% over the past three years

Performance at Emira Property Fund Limited (JSE:EMI) has been reasonably good and CEO Geoff Jennett has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 3rd of September. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Emira Property Fund

How Does Total Compensation For Geoff Jennett Compare With Other Companies In The Industry?

According to our data, Emira Property Fund Limited has a market capitalization of R5.2b, and paid its CEO total annual compensation worth R15m over the year to March 2024. That's slightly lower by 3.5% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at R5.0m.

In comparison with other companies in the South African REITs industry with market capitalizations ranging from R1.8b to R7.1b, the reported median CEO total compensation was R9.7m. This suggests that Geoff Jennett is paid more than the median for the industry. Moreover, Geoff Jennett also holds R14m worth of Emira Property Fund stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	R5.0m	R3.6m	33%
Other	R9.9m	R12m	67%
Total Compensation	R15m	R15m	100%

Speaking on an industry level, nearly 37% of total compensation represents salary, while the remainder of 63% is other remuneration. There isn't a significant difference between Emira Property Fund and the broader market, in terms of salary allocation in the overall compensation package. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Emira Property Fund Limited's Growth Numbers

Emira Property Fund Limited has seen its earnings per share (EPS) increase by 32% a year over the past three years. It saw its revenue drop 2.5% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Emira Property Fund Limited Been A Good Investment?

Most shareholders would probably be pleased with Emira Property Fund Limited for providing a total return of 68% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 5 warning signs for Emira Property Fund (2 are a bit unpleasant!) that you should be aware of before investing here.

Switching gears from Emira Property Fund, 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. 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.