The Compensation For Octodec Investments Limited's (JSE:OCT) CEO Looks Deserved And Here's Why

Key Insights

• Octodec Investments will host its Annual General Meeting on 3rd of February
• Total pay for CEO Jeff Wapnick includes R7.44m salary
• The overall pay is comparable to the industry average
• Over the past three years, Octodec Investments' EPS grew by 21% and over the past three years, the total shareholder return was 96%

We have been pretty impressed with the performance at Octodec Investments Limited (JSE:OCT) recently and CEO Jeff Wapnick deserves a mention for their role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 3rd of February. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

See our latest analysis for Octodec Investments

Comparing Octodec Investments Limited's CEO Compensation With The Industry

According to our data, Octodec Investments Limited has a market capitalization of R3.0b, and paid its CEO total annual compensation worth R8.0m over the year to August 2024. That's just a smallish increase of 3.7% on last year. We note that the salary portion, which stands at R7.44m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the South African REITs industry with market capitalizations ranging from R1.8b to R7.4b, the reported median CEO total compensation was R9.0m. So it looks like Octodec Investments compensates Jeff Wapnick in line with the median for the industry. What's more, Jeff Wapnick holds R48m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	R7.4m	R7.3m	92%
Other	R604k	R459k	8%
Total Compensation	R8.0m	R7.8m	100%

On an industry level, roughly 37% of total compensation represents salary and 63% is other remuneration. Octodec Investments is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Octodec Investments Limited's Growth

Over the past three years, Octodec Investments Limited has seen its earnings per share (EPS) grow by 21% per year. Its revenue is up 5.0% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. 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 Octodec Investments Limited Been A Good Investment?

Boasting a total shareholder return of 96% over three years, Octodec Investments 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.

To Conclude...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus 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 pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 4 warning signs for Octodec Investments (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

Important note: Octodec Investments is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.