Here's Why Shareholders May Want To Be Cautious With Increasing PBT Group Limited's (JSE:PBG) CEO Pay Packet

Key Insights

• PBT Group's Annual General Meeting to take place on 29th of August
• CEO Elizna Read's total compensation includes salary of R2.27m
• The overall pay is 120% above the industry average
• PBT Group's EPS declined by 7.0% over the past three years while total shareholder return over the past three years was 4.7%

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Share price growth at PBT Group Limited (JSE:PBG) has remained rather flat over the last few years and it may be because earnings has struggled to grow at all. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 29th of August. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

View our latest analysis for PBT Group

How Does Total Compensation For Elizna Read Compare With Other Companies In The Industry?

Our data indicates that PBT Group Limited has a market capitalization of R598m, and total annual CEO compensation was reported as R5.3m for the year to March 2025. Notably, that's an increase of 11% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at R2.3m.

On comparing similar-sized companies in the South Africa IT industry with market capitalizations below R3.5b, we found that the median total CEO compensation was R2.4m. This suggests that Elizna Read is paid more than the median for the industry. Furthermore, Elizna Read directly owns R39m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 61% of total compensation represents salary and 39% is other remuneration. In PBT Group's case, non-salary compensation represents a greater slice of total remuneration, 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.

PBT Group Limited's Growth

PBT Group Limited has reduced its earnings per share by 7.0% a year over the last three years. In the last year, its revenue is up 1.4%.

Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has PBT Group Limited Been A Good Investment?

PBT Group Limited has not done too badly by shareholders, with a total return of 4.7%, over three years. It would be nice to see that metric improve in the future. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

In Summary...

The flat share price growth combined with the the fact that earnings have failed to grow makes us wonder whether the share price will have any further strong momentum. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 3 warning signs for PBT Group that investors should look into moving forward.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.