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Is DRDGOLD Limited's (NYSE:DRD) CEO Overpaid Relative To Its Peers?

Simply Wall St

Niel Pretorius has been the CEO of DRDGOLD Limited (NYSE:DRD) since 2009. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for DRDGOLD

How Does Niel Pretorius's Compensation Compare With Similar Sized Companies?

According to our data, DRDGOLD Limited has a market capitalization of US$511m, and paid its CEO total annual compensation worth R13m over the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at R6.5m. We examined companies with market caps from R3.0b to R12b, and discovered that the median CEO total compensation of that group was R26m.

Most shareholders would consider it a positive that Niel Pretorius takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

The graphic below shows how CEO compensation at DRDGOLD has changed from year to year.

NYSE:DRD CEO Compensation, February 13th 2020
NYSE:DRD CEO Compensation, February 13th 2020

Is DRDGOLD Limited Growing?

On average over the last three years, DRDGOLD Limited has shrunk earnings per share by 59% each year (measured with a line of best fit). Its revenue is up 11% over last year.

Unfortunately, earnings per share have trended lower over the last three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.

Has DRDGOLD Limited Been A Good Investment?

Since shareholders would have lost about 4.0% over three years, some DRDGOLD Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

It looks like DRDGOLD Limited pays its CEO less than similar sized companies.

Niel Pretorius is paid less than CEOs of similar size companies, but the company isn't growing and total shareholder returns have been disappointing. While one could argue it is appropriate for the CEO to be paid less than other CEOs of similar sized companies, given company performance, we would not call the pay overly generous. So you may want to check if insiders are buying DRDGOLD shares with their own money (free access).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.