Yahoo Finance South32 Limited's (ASX:S32) CEO Looks Like They Deserve Their Pay Packet
It would be hard to discount the role that CEO Graham Kerr has played in delivering the impressive results at South32 Limited (ASX:S32) recently. Coming up to the next AGM on 27 October 2022, shareholders would be keeping this in mind. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.
See our latest analysis for South32
How Does Total Compensation For Graham Kerr Compare With Other Companies In The Industry?
At the time of writing, our data shows that South32 Limited has a market capitalization of AU$17b, and reported total annual CEO compensation of US$4.4m for the year to June 2022. We note that's a decrease of 8.3% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.
For comparison, other companies in the industry with market capitalizations above AU$13b, reported a median total CEO compensation of US$3.8m. This suggests that South32 remunerates its CEO largely in line with the industry average. What's more, Graham Kerr holds AU$15m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2022 | 2021 | Proportion (2022) |
Salary | US$1.1m | US$1.3m | 26% |
Other | US$3.3m | US$3.5m | 74% |
Total Compensation | US$4.4m | US$4.8m | 100% |
Speaking on an industry level, nearly 59% of total compensation represents salary, while the remainder of 41% is other remuneration. It's interesting to note that South32 allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
South32 Limited's Growth
South32 Limited's earnings per share (EPS) grew 96% per year over the last three years. It achieved revenue growth of 69% 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 South32 Limited Been A Good Investment?
Boasting a total shareholder return of 67% over three years, South32 Limited has done well by shareholders. 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.
In Summary...
The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for South32 (of which 1 makes us a bit uncomfortable!) that you should know about in order to have a holistic understanding of the stock.
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.
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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