How Much Is DRDGOLD Limited (NYSE:DRD) Paying Its CEO?

This article will reflect on the compensation paid to Niel Pretorius who has served as CEO of DRDGOLD Limited (NYSE:DRD) since 2009. 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 DRDGOLD

How Does Total Compensation For Niel Pretorius Compare With Other Companies In The Industry?

At the time of writing, our data shows that DRDGOLD Limited has a market capitalization of US$1.2b, and reported total annual CEO compensation of R19m for the year to June 2020. We note that's an increase of 44% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at R6.9m.

On examining similar-sized companies in the industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was R64m. Accordingly, DRDGOLD pays its CEO under the industry median. What's more, Niel Pretorius holds US$682k worth of shares in the company in their own name.

Talking in terms of the industry, salary represented approximately 36% of total compensation out of all the companies we analyzed, while other remuneration made up 64% of the pie. Although there is a difference in how total compensation is set, DRDGOLD more or less reflects the market in terms of setting the salary. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at DRDGOLD Limited's Growth Numbers

Over the past three years, DRDGOLD Limited has seen its earnings per share (EPS) grow by 194% per year. It achieved revenue growth of 51% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has DRDGOLD Limited Been A Good Investment?

Most shareholders would probably be pleased with DRDGOLD Limited for providing a total return of 310% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

As we touched on above, DRDGOLD Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Considering robust EPS growth, we believe Niel to be modestly paid. And given most shareholders are probably very happy with recent shareholder returns, they might even think Niel deserves a raise!

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for DRDGOLD that investors should look into moving forward.

Switching gears from DRDGOLD, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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.

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