A Quick Analysis On Redefine Properties' (JSE:RDF) CEO Compensation

Andrew Konig became the CEO of Redefine Properties Limited (JSE:RDF) in 2014, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the funds from operations and shareholder returns of the company.

Check out our latest analysis for Redefine Properties

Comparing Redefine Properties Limited's CEO Compensation With the industry

At the time of writing, our data shows that Redefine Properties Limited has a market capitalization of R22b, and reported total annual CEO compensation of R14m for the year to August 2020. Notably, that's a decrease of 19% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at R4.5m.

For comparison, other companies in the same industry with market capitalizations ranging between R15b and R47b had a median total CEO compensation of R30m. This suggests that Andrew Konig is paid below the industry median. Moreover, Andrew Konig also holds R31m worth of Redefine Properties stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 57% of total compensation out of all the companies we analyzed, while other remuneration made up 43% of the pie. Redefine Properties sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Redefine Properties Limited's Growth

Over the last one year, Redefine Properties Limited has shrunk its funds from operations (FFO) by 45% . In the last year, its revenue changed by just 0.9%.

Few shareholders would be pleased to read that FFO have declined. And the flat revenue is seriously uninspiring. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Redefine Properties Limited Been A Good Investment?

Since shareholders would have lost about 56% over three years, some Redefine Properties Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As previously discussed, Andrew is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. While we are quite underwhelmed with FFO growth, the shareholder returns over the past three years have also failed to impress us. We can't say the CEO compensation is high, but shareholders will be cold to a bump at this stage, considering negative investor returns.

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. We identified 5 warning signs for Redefine Properties (2 don't sit too well with us!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

If you decide to trade Redefine Properties, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

This article by Simply Wall St is general in nature. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.