Shareholders Will Probably Hold Off On Increasing Vodacom Group Limited's (JSE:VOD) CEO Compensation For The Time Being

CEO Mohamed Shameel Joosub has done a decent job of delivering relatively good performance at Vodacom Group Limited (JSE:VOD) recently. As shareholders go into the upcoming AGM on 19 July 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Vodacom Group

How Does Total Compensation For Mohamed Shameel Joosub Compare With Other Companies In The Industry?

At the time of writing, our data shows that Vodacom Group Limited has a market capitalization of R220b, and reported total annual CEO compensation of R55m for the year to March 2021. We note that's an increase of 27% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at R13m.

In comparison with other companies in the industry with market capitalizations over R114b , the reported median total CEO compensation was R37m. Hence, we can conclude that Mohamed Shameel Joosub is remunerated higher than the industry median.

Component	2021	2020	Proportion (2021)
Salary	R13m	R12m	23%
Other	R42m	R31m	77%
Total Compensation	R55m	R43m	100%

Speaking on an industry level, nearly 29% of total compensation represents salary, while the remainder of 71% is other remuneration. Vodacom Group pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Vodacom Group Limited's Growth

Over the past three years, Vodacom Group Limited has seen its earnings per share (EPS) grow by 1.1% per year. In the last year, its revenue is up 8.3%.

We're not particularly impressed by the revenue growth, but it is good to see modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. 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 Vodacom Group Limited Been A Good Investment?

Vodacom Group Limited has generated a total shareholder return of 26% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Vodacom Group that you should be aware of before investing.

Important note: Vodacom Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

When trading stocks or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.