What Can We Conclude About Telkom SA SOC's (JSE:TKG) CEO Pay?
Sipho Maseko has been the CEO of Telkom SA SOC Limited (JSE:TKG) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Telkom SA SOC pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Telkom SA SOC
How Does Total Compensation For Sipho Maseko Compare With Other Companies In The Industry?
Our data indicates that Telkom SA SOC Limited has a market capitalization of R16b, and total annual CEO compensation was reported as R22m for the year to March 2020. We note that's a decrease of 9.5% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at R8.8m.
For comparison, other companies in the same industry with market capitalizations ranging between R5.9b and R24b had a median total CEO compensation of R12m. Hence, we can conclude that Sipho Maseko is remunerated higher than the industry median.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | R8.8m | R8.3m | 40% |
| Other | R13m | R16m | 60% |
| Total Compensation | R22m | R24m | 100% |
Speaking on an industry level, nearly 87% of total compensation represents salary, while the remainder of 13% is other remuneration. In Telkom SA SOC'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.
A Look at Telkom SA SOC Limited's Growth Numbers
Over the last three years, Telkom SA SOC Limited has shrunk its earnings per share by 38% per year. Revenue was pretty flat on last year.
The decline in EPS is a bit concerning. And the flat revenue is seriously uninspiring. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Telkom SA SOC Limited Been A Good Investment?
Given the total shareholder loss of 24% over three years, many shareholders in Telkom SA SOC Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
As we touched on above, Telkom SA SOC Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. What's equally worrying is that the company isn't growing by our analysis. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Telkom SA SOC 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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About JSE:TKG
Telkom SA SOC
Provides integrated communications and information technology (IT) services to residential, business, government, wholesale, and corporate customers in South Africa, the United States, the United Kingdom, rest of Europe, and internationally.
Adequate balance sheet and fair value.
