We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Murray & Roberts Holdings Limited's (JSE:MUR) CEO For Now

editorial-team@simplywallst.com (Simply Wall St)

Thu, Oct 26, 2023, 10:00 PM 4 min read

Key Insights

Murray & Roberts Holdings will host its Annual General Meeting on 2nd of November
Salary of R8.34m is part of CEO Henry Laas's total remuneration
The total compensation is 294% higher than the average for the industry
Over the past three years, Murray & Roberts Holdings' EPS grew by 71% and over the past three years, the total loss to shareholders 91%

Shareholders of Murray & Roberts Holdings Limited (JSE:MUR) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 2nd of November. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Murray & Roberts Holdings

Comparing Murray & Roberts Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Murray & Roberts Holdings Limited has a market capitalization of R282m, and reported total annual CEO compensation of R14m for the year to June 2023. That's a notable decrease of 25% on last year. We note that the salary of R8.34m makes up a sizeable portion of the total compensation received by the CEO.

In comparison with other companies in the South Africa Construction industry with market capitalizations under R3.8b, the reported median total CEO compensation was R3.6m. This suggests that Henry Laas is paid more than the median for the industry. Furthermore, Henry Laas directly owns R3.0m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	R8.3m	R7.9m	59%
Other	R5.9m	R11m	41%
Total Compensation	R14m	R19m	100%

On an industry level, roughly 70% of total compensation represents salary and 30% is other remuneration. Murray & Roberts Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation — JSE:MUR CEO Compensation October 27th 2023

A Look at Murray & Roberts Holdings Limited's Growth Numbers

Over the past three years, Murray & Roberts Holdings Limited has seen its earnings per share (EPS) grow by 71% per year. It achieved revenue growth of 42% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Murray & Roberts Holdings Limited Been A Good Investment?

With a total shareholder return of -91% over three years, Murray & Roberts Holdings Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 3 warning signs for Murray & Roberts Holdings you should be aware of, and 1 of them is significant.

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.