Here's Why Shareholders Should Examine Vukile Property Fund Limited's (JSE:VKE) CEO Compensation Package More Closely

Vukile Property Fund Limited (JSE:VKE) has not performed well recently and CEO Laurence Rapp will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 31 January 2022. 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.

View our latest analysis for Vukile Property Fund

How Does Total Compensation For Laurence Rapp Compare With Other Companies In The Industry?

According to our data, Vukile Property Fund Limited has a market capitalization of R11b, and paid its CEO total annual compensation worth R14m over the year to March 2021. We note that's a decrease of 35% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at R5.0m.

On examining similar-sized companies in the industry with market capitalizations between R6.1b and R25b, we discovered that the median CEO total compensation of that group was R7.8m. Hence, we can conclude that Laurence Rapp is remunerated higher than the industry median. What's more, Laurence Rapp holds R57m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	R5.0m	R4.8m	36%
Other	R9.0m	R17m	64%
Total Compensation	R14m	R21m	100%

On an industry level, around 63% of total compensation represents salary and 37% is other remuneration. In Vukile Property Fund's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Vukile Property Fund Limited's Growth Numbers

Over the last three years, Vukile Property Fund Limited has shrunk its earnings per share by 15% per year. Its revenue is up 5.7% over the last year.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Vukile Property Fund Limited Been A Good Investment?

With a three year total loss of 22% for the shareholders, Vukile Property Fund Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for Vukile Property Fund you should be aware of, and 2 of them are potentially serious.

Important note: Vukile Property Fund 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.