Key Insights
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African Equity Empowerment Investments to hold its Annual General Meeting on 27th of February
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Total pay for CEO Valentine Dzvova includes R2.18m salary
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The overall pay is 51% below the industry average
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African Equity Empowerment Investments’ total shareholder return over the past three years was 77% while its EPS grew by 90% over the past three years
The solid performance at African Equity Empowerment Investments Limited (JSE:AEE) has been impressive and shareholders will probably be pleased to know that CEO Valentine Dzvova has delivered. At the upcoming AGM on 27th of February, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.
Check out our latest analysis for African Equity Empowerment Investments
Comparing African Equity Empowerment Investments Limited’s CEO Compensation With The Industry
According to our data, African Equity Empowerment Investments Limited has a market capitalization of R422m, and paid its CEO total annual compensation worth R3.1m over the year to August 2022. We note that’s an increase of 50% above last year. In particular, the salary of R2.18m, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the South Africa Capital Markets industry with market capitalizations under R3.6b, the reported median total CEO compensation was R6.3m. That is to say, Valentine Dzvova is paid under the industry median.
|
Component |
2022 |
2021 |
Proportion (2022) |
|
Salary |
R2.2m |
R1.7m |
70% |
|
Other |
R923k |
R347k |
30% |
|
Total Compensation |
R3.1m |
R2.1m |
100% |
On an industry level, roughly 39% of total compensation represents salary and 61% is other remuneration. African Equity Empowerment Investments pays out 70% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at African Equity Empowerment Investments Limited’s Growth Numbers
African Equity Empowerment Investments Limited has seen its earnings per share (EPS) increase by 90% a year over the past three years. In the last year, its revenue changed by just 0.2%.
Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business. We don’t have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has African Equity Empowerment Investments Limited Been A Good Investment?
Most shareholders would probably be pleased with African Equity Empowerment Investments Limited for providing a total return of 77% over three years. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
To Conclude…
Seeing that company performance has been quite good recently, some shareholders may feel that CEO compensation may not be the biggest focus in the upcoming AGM. However, despite the strong growth in earnings and share price growth, the focus for shareholders would be how the company plans to steer the company towards sustainable profitability in the near future.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company’s key performance areas. In our study, we found 3 warning signs for African Equity Empowerment Investments you should be aware of, and 2 of them are concerning.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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