Stock Analysis

Most Shareholders Will Probably Agree With Putprop Limited's (JSE:PPR) CEO Compensation

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The performance at Putprop Limited (JSE:PPR) has been rather lacklustre of late and shareholders may be wondering what CEO Bruno Carleo is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 04 November 2021. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. In our opinion, CEO compensation does not look excessive and we discuss why.

Check out our latest analysis for Putprop

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

At the time of writing, our data shows that Putprop Limited has a market capitalization of R178m, and reported total annual CEO compensation of R1.8m for the year to June 2021. That's a fairly small increase of 7.4% over the previous year. Notably, the salary which is R1.30m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under R3.0b, the reported median total CEO compensation was R3.4m. Accordingly, Putprop pays its CEO under the industry median. What's more, Bruno Carleo holds R9.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20212020Proportion (2021)
Salary R1.3m R1.1m 74%
Other R449k R485k 26%
Total CompensationR1.8m R1.6m100%

Speaking on an industry level, nearly 74% of total compensation represents salary, while the remainder of 26% is other remuneration. There isn't a significant difference between Putprop and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

JSE:PPR CEO Compensation October 29th 2021

Putprop Limited's Growth

Putprop Limited's earnings per share (EPS) grew 51% per year over the last three years. Its revenue is up 4.2% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Putprop Limited Been A Good Investment?

With a three year total loss of 7.3% for the shareholders, Putprop Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The uninspiring share price returns contrasts with the strong EPS growth, suggesting that there may be other factors at play causing it to diverge from fundamentals. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their 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 7 warning signs (and 2 which are potentially serious) in Putprop we think you should know about.

Switching gears from Putprop, 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.

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.

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