It's Unlikely That Naspers Limited's (JSE:NPN) CEO Will See A Huge Pay Rise This Year

CEO Bob van Dijk has done a decent job of delivering relatively good performance at Naspers Limited (JSE:NPN) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 25 August 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Naspers

How Does Total Compensation For Bob van Dijk Compare With Other Companies In The Industry?

According to our data, Naspers Limited has a market capitalization of R1.0t, and paid its CEO total annual compensation worth US$17m over the year to March 2021. That's a fairly small increase of 4.3% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.4m.

On comparing similar companies in the industry with market capitalizations above R120b, we found that the median total CEO compensation was US$7.4m. Accordingly, our analysis reveals that Naspers Limited pays Bob van Dijk north of the industry median. Moreover, Bob van Dijk also holds R2.6b worth of Naspers stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	US$1.4m	US$1.4m	9%
Other	US$15m	US$15m	91%
Total Compensation	US$17m	US$16m	100%

Speaking on an industry level, nearly 43% of total compensation represents salary, while the remainder of 57% is other remuneration. It's interesting to note that Naspers allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Naspers Limited's Growth Numbers

Over the last three years, Naspers Limited has shrunk its earnings per share by 22% per year. It achieved revenue growth of 48% over the last year.

Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Naspers Limited Been A Good Investment?

With a total shareholder return of 16% over three years, Naspers Limited shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

The overall company performance has been commendable, however there are still areas for improvement. We still think that some shareholders will be hesitant of increasing CEO pay until EPS growth improves, since they are already paid higher than the industry.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Naspers that investors should think about before committing capital to this 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.
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