Yahoo Finance How Should Investors React To DBS Group Holdings Ltd's (SGX:D05) CEO Pay?
Piyush Gupta became the CEO of DBS Group Holdings Ltd (SGX:D05) in 2009. First, this article will compare CEO compensation with compensation at other large companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for DBS Group Holdings
How Does Piyush Gupta's Compensation Compare With Similar Sized Companies?
According to our data, DBS Group Holdings Ltd has a market capitalization of S$51b, and paid its CEO total annual compensation worth S$12m over the year to December 2019. That's a fairly small increase of 2.2% on year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at S$1.2m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations over S$11b and the median CEO total compensation was S$7.4m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On a sector level, around 69% of total compensation represents salary and 31% is other remuneration. DBS Group Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry.
Thus we can conclude that Piyush Gupta receives more in total compensation than the median of a group of large companies in the same market as DBS Group Holdings Ltd. 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 DBS Group Holdings has changed from year to year.
Is DBS Group Holdings Ltd Growing?
On average over the last three years, DBS Group Holdings Ltd has seen earnings per share (EPS) move in a favourable direction by 15% each year (using a line of best fit). Its revenue is up 4.3% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. It could be important to check this free visual depiction of what analysts expect for the future.
Has DBS Group Holdings Ltd Been A Good Investment?
DBS Group Holdings Ltd has served shareholders reasonably well, with a total return of 10% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary...
We compared the total CEO remuneration paid by DBS Group Holdings Ltd, and compared it to remuneration at a group of other large companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. We also note that, over the same time frame, shareholder returns haven't been bad. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we'd recommend further research on management. Shifting gears from CEO pay for a second, we've picked out 1 warning sign for DBS Group Holdings that investors should be aware of in a dynamic business environment.
If you want to buy a stock that is better than DBS Group Holdings, this free list of high return, low debt companies is a great place to look.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.
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. Thank you for reading.
