Yahoo Finance Here's Why Discovery Limited's (JSE:DSY) CEO Might See A Pay Rise Soon
Key Insights
Discovery to hold its Annual General Meeting on 16th of November
CEO Adrian Gore's total compensation includes salary of R7.99m
The overall pay is 51% below the industry average
Over the past three years, Discovery's EPS grew by 276% and over the past three years, the total shareholder return was 3.3%
Shareholders will probably not be disappointed by the robust results at Discovery Limited (JSE:DSY) recently and they will be keeping this in mind as they go into the AGM on 16th of November. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. We have prepared some analysis below and we show why we think CEO compensation looks decent with even the possibility for a raise.
View our latest analysis for Discovery
Comparing Discovery Limited's CEO Compensation With The Industry
At the time of writing, our data shows that Discovery Limited has a market capitalization of R86b, and reported total annual CEO compensation of R28m for the year to June 2023. Notably, that's an increase of 61% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at R8.0m.
On examining similar-sized companies in the South African Insurance industry with market capitalizations between R37b and R119b, we discovered that the median CEO total compensation of that group was R56m. Accordingly, Discovery pays its CEO under the industry median. Furthermore, Adrian Gore directly owns R11b worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | R8.0m | R7.6m | 29% |
Other | R20m | R9.7m | 71% |
Total Compensation | R28m | R17m | 100% |
Talking in terms of the industry, salary represented approximately 32% of total compensation out of all the companies we analyzed, while other remuneration made up 68% of the pie. There isn't a significant difference between Discovery and the broader market, in terms of salary allocation in the overall compensation package. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Discovery Limited's Growth
Discovery Limited's earnings per share (EPS) grew 276% per year over the last three years. It achieved revenue growth of 29% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Discovery Limited Been A Good Investment?
With a total shareholder return of 3.3% over three years, Discovery Limited has done okay by shareholders, but there's always room for improvement. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.
To Conclude...
The company's overall performance, while not bad, could be better. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.
Shareholders may want to check for free if Discovery insiders are buying or selling shares.
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.
