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Here's What We Learned About The CEO Pay At Pan African Resources PLC (LON:PAF)

Simply Wall St
·4 min read

Cobus Loots has been the CEO of Pan African Resources PLC (LON:PAF) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Pan African Resources

How Does Total Compensation For Cobus Loots Compare With Other Companies In The Industry?

At the time of writing, our data shows that Pan African Resources PLC has a market capitalization of UK£399m, and reported total annual CEO compensation of US$1.0m for the year to June 2020. Notably, that's an increase of 49% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$396k.

In comparison with other companies in the industry with market capitalizations ranging from UK£153m to UK£613m, the reported median CEO total compensation was US$1.0m. So it looks like Pan African Resources compensates Cobus Loots in line with the median for the industry. What's more, Cobus Loots holds UK£325k worth of shares in the company in their own name.

Component

2020

2019

Proportion (2020)

Salary

US$396k

US$358k

38%

Other

US$635k

US$334k

62%

Total Compensation

US$1.0m

US$692k

100%

Talking in terms of the industry, salary represented approximately 64% of total compensation out of all the companies we analyzed, while other remuneration made up 36% of the pie. It's interesting to note that Pan African Resources allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

A Look at Pan African Resources PLC's Growth Numbers

Over the last three years, Pan African Resources PLC has shrunk its earnings per share by 12% per year. Its revenue is up 26% over the last year.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Pan African Resources PLC Been A Good Investment?

Boasting a total shareholder return of 70% over three years, Pan African Resources PLC 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.

To Conclude...

As previously discussed, Cobus is compensated close to the median for companies of its size, and which belong to the same industry. The company has logged solid shareholder returns for the past three years. At the same time, revenues are also moving northwards at a healthy pace. On a worrying note, its important to acknowledge that EPS growth has been negative recently. Considering overall performance, it's fair to say Cobus is paid reasonably.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 3 warning signs for Pan African Resources that investors should look into moving forward.

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.

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.

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