Indluplace Properties Limited (JSE:ILU) has not performed well recently and CEO Petrus de Wit will probably need to up their game. At the upcoming AGM on 01 March 2022, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.
Comparing Indluplace Properties Limited's CEO Compensation With the industry
Our data indicates that Indluplace Properties Limited has a market capitalization of R1.0b, and total annual CEO compensation was reported as R3.5m for the year to September 2021. Notably, that's a decrease of 8.3% over the year before. We note that the salary portion, which stands at R2.18m constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under R3.0b, the reported median total CEO compensation was R3.2m. From this we gather that Petrus de Wit is paid around the median for CEOs in the industry. What's more, Petrus de Wit holds R16m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Talking in terms of the industry, salary represented approximately 66% of total compensation out of all the companies we analyzed, while other remuneration made up 34% of the pie. Although there is a difference in how total compensation is set, Indluplace Properties 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.
Indluplace Properties Limited's Growth
Over the last three years, Indluplace Properties Limited has shrunk its earnings per share by 84% per year. It saw its revenue drop 6.6% over the last year.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Indluplace Properties Limited Been A Good Investment?
Few Indluplace Properties Limited shareholders would feel satisfied with the return of -34% over three years. This suggests it would be unwise for the company to pay the CEO too generously.
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.
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. That's why we did our research, and identified 4 warning signs for Indluplace Properties (of which 2 are a bit concerning!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from Indluplace Properties, 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.
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.