Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
In 2015 Kim Chiang Png was appointed CEO of SIA Engineering Company Limited (SGX:S59). First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for SIA Engineering
How Does Kim Chiang Png’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that SIA Engineering Company Limited has a market cap of S$2.8b, and is paying total annual CEO compensation of S$2.0m. (This number is for the twelve months until March 2018). While we always look at total compensation first, we note that the salary component is less, at S$633k. We examined companies with market caps from S$1.4b to S$4.4b, and discovered that the median CEO total compensation of that group was S$1.1m.
Thus we can conclude that Kim Chiang Png receives more in total compensation than the median of a group of companies in the same market, and of similar size to SIA Engineering Company Limited. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at SIA Engineering has changed from year to year.
SGX:S59 CEO Compensation, June 8th 2019
Is SIA Engineering Company Limited Growing?
On average over the last three years, SIA Engineering Company Limited has shrunk earnings per share by 22% each year (measured with a line of best fit). It saw its revenue drop -6.8% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. 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 SIA Engineering Company Limited Been A Good Investment?
Since shareholders would have lost about 28% over three years, some SIA Engineering Company 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…
We compared total CEO remuneration at SIA Engineering Company Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
Arguably worse, investors are without a positive return for the last three years. In our opinion the CEO might be paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling SIA Engineering shares (free trial).
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.
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.
If you spot an error that warrants correction, please contact the editor at [email protected]. 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. Thank you for reading.