What Can We Conclude About Pepkor Holdings' (JSE:PPH) CEO Pay?

Leon Lourens has been the CEO of Pepkor Holdings Limited (JSE:PPH) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Pepkor Holdings.

View our latest analysis for Pepkor Holdings

How Does Total Compensation For Leon Lourens Compare With Other Companies In The Industry?

Our data indicates that Pepkor Holdings Limited has a market capitalization of R53b, and total annual CEO compensation was reported as R14m for the year to September 2020. Notably, that's a decrease of 14% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at R6.2m.

On examining similar-sized companies in the industry with market capitalizations between R30b and R96b, we discovered that the median CEO total compensation of that group was R35m. Accordingly, Pepkor Holdings pays its CEO under the industry median. Furthermore, Leon Lourens directly owns R1.0m worth of shares in the company.

Speaking on an industry level, nearly 49% of total compensation represents salary, while the remainder of 51% is other remuneration. Although there is a difference in how total compensation is set, Pepkor Holdings more or less reflects the market in terms of setting the salary. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Pepkor Holdings Limited's Growth

Over the last three years, Pepkor Holdings Limited has shrunk its earnings per share by 56% per year. In the last year, its revenue is up 3.5%.

Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Pepkor Holdings Limited Been A Good Investment?

With a three year total loss of 32% for the shareholders, Pepkor Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we touched on above, Pepkor Holdings Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. EPS growth has failed to impress us, and the same can be said about shareholder returns. 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 a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Pepkor Holdings that you should be aware of before investing.

Switching gears from Pepkor Holdings, 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.

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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.
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