The CEO of Sheng Siong Group Ltd (SGX:OV8) is Hock Chee Lim. First, this article will compare CEO compensation with compensation at similar sized companies. 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.
How Does Hock Chee Lim's Compensation Compare With Similar Sized Companies?
Our data indicates that Sheng Siong Group Ltd is worth S$1.9b, and total annual CEO compensation was reported as S$3.2m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at S$369k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from S$1.4b to S$4.6b, and discovered that the median CEO total compensation of that group was S$2.3m.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Speaking on an industry level, we can see that nearly 91% of total compensation represents salary, while the remainder of 9.1% is other remuneration. Sheng Siong Group sets aside a smaller share of compensation for salary, in comparison to the overall industry.
Thus we can conclude that Hock Chee Lim receives more in total compensation than the median of a group of companies in the same market, and of similar size to Sheng Siong Group Ltd. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance. The graphic below shows how CEO compensation at Sheng Siong Group has changed from year to year.
Is Sheng Siong Group Ltd Growing?
Sheng Siong Group Ltd has seen earnings per share (EPS) move positively by an average of 5.9% a year, over the last three years (using a line of best fit). It achieved revenue growth of 11% over the last year.
I think the revenue growth is good. And, while modest, the earnings per share growth is noticeable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. You might want to check this free visual report on analyst forecasts for future earnings.
Has Sheng Siong Group Ltd Been A Good Investment?
I think that the total shareholder return of 45%, over three years, would leave most Sheng Siong Group Ltd shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
We compared the total CEO remuneration paid by Sheng Siong Group Ltd, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
While we generally prefer to see stronger EPS growth, there's no arguing with the strong returns to shareholders, over the last three years. Considering this fine result for investors, we daresay the CEO compensation might be apt. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Sheng Siong Group.
Important note: Sheng Siong Group may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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