This Is Why Cashbuild Limited's (JSE:CSB) CEO Compensation Looks Appropriate

CEO Werner de Jager has done a decent job of delivering relatively good performance at Cashbuild Limited (JSE:CSB) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 28 November 2022. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

Check out our latest analysis for Cashbuild

How Does Total Compensation For Werner de Jager Compare With Other Companies In The Industry?

Our data indicates that Cashbuild Limited has a market capitalization of R4.4b, and total annual CEO compensation was reported as R10m for the year to June 2022. Notably, that's a decrease of 21% over the year before. In particular, the salary of R6.16m, makes up a fairly large portion of the total compensation being paid to the CEO.

On comparing similar companies from the same industry with market caps ranging from R1.7b to R6.9b, we found that the median CEO total compensation was R12m. This suggests that Cashbuild remunerates its CEO largely in line with the industry average. Moreover, Werner de Jager also holds R15m worth of Cashbuild stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2022	2021	Proportion (2022)
Salary	R6.2m	R5.7m	60%
Other	R4.1m	R7.3m	40%
Total Compensation	R10m	R13m	100%

Speaking on an industry level, nearly 31% of total compensation represents salary, while the remainder of 69% is other remuneration. According to our research, Cashbuild has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Cashbuild Limited's Growth

Cashbuild Limited has seen its earnings per share (EPS) increase by 3.8% a year over the past three years. Its revenue is down 12% over the previous year.

We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Cashbuild Limited Been A Good Investment?

With a total shareholder return of 11% over three years, Cashbuild Limited shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

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 2 warning signs for Cashbuild (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

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.

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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.